MANI AND COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal disposed of five appeals, viz., I. T. A. Nos. 839 and 840/Cochin of 1984 filed by the assessee for the assessment years 1979-80 and 1980-81 and I. T. A. Nos. 14, 15 and 16/ Cochin of 1985 filed by the Department for the same period, by a common order. THE assessee is a firm of building contractors with the military engineering service. It had executed in part during the year ending March 31, 1979, seven items of work for the MED in Cochin, Sri Harikkotta at Trivandrum and Goa. According to the assessee daily statements of the receipts and expenses at each of the sites with all available vouchers were sent to the office of the firm and from these statements and vouchers a cash book and ledger for each item of work was written up. A consolidated profit and loss account as well as the balance-sheet was drawn up from these books and filed with the return of income together with the necessary schedules. Subsequently, the assessee produced these statements and books before the Income-tax Officer. After examining the records, the Income-tax Officer found that the books are written at a stretch and no contemporary evidence was produced to substantiate the genuineness of the books. THE assessee could not produce the original entry. THE assessing authority while rejecting the book results and the contention of the assessee that it suffered a loss, estimated the net profit at 10 per cent, of the gross profits.

(2.) THE assessee filed appeal before the Commissioner of Income-tax (Appeals). This appeal was disposed of in the following terms :

(3.) SHRI K. M. V. Pandalai, learned counsel appearing for the assessee, contended that the Tribunal has seriously erred in upholding the estimate of the profits arrived at by the Income-tax Officer despite the assessee maintaining the accounts of his business. Drawing sustenance from the reasons given by the Commissioner of Income-tax (Appeals) learned counsel submits that the assessee's books of account were original books and those books were produced before the Income-tax Officer and, therefore there was no justification to reject the book results. According to him, the Income-tax Officer went wrong in assuming that the books of account did not represent the correct facts and therefore his estimate is liable to be rejected.