ARVIND BALONI Vs. ITAT AND ORS.

JUDGEMENT

(1.) THE Assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, "the Act") against the order dated 27 -1 -2008, annexure A -3, passed by the Income Tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh in I.T.A. No. 497/Chd/2007 for the assessment year 2004 -05, proposing to raise the following question of law:

(2.) THE Assessee is a manpower supplier. He failed to produce books of account during assessment. The assessing officer assessed income equal to 5 per cent., of the gross receipts. On appeal, the Commissioner (Appeals) held that the book results of the Assessee should have been accepted. The Tribunal restored the assessment made by the assessing officer, modifying the same equal to 4 per cent., of gross receipts. It was held that the Commissioner (Appeals) was not justified in interfering with the assessment when books of account had not been produced. No doubt the best judgment assessment could not be arbitrary, but some guess work was inevitable. Mere fact that the Assessee declared income which was almost equal to the income assessed in the previous year, could not be conclusive. The Assessee had disclosed gross profit of 6.45 per cent., and claimed deductions, even though he was receiving 7 per cent., service charges and was being reimbursed salary, wages, ESI and EPF which had been claimed as deductions. The Tribunal reduced the assessed income to 4 per cent., of the turnover.

(3.) LEARNED Counsel for the Appellant submitted that rate of 4 per cent., of the turnover was arbitrary as in the earlier year, the Assessee had been assessed at lower income and consistency had to be maintained. Reliance is placed on the judgments of the Madhya Pradesh High Court in Asst. CIT v. Gendalal Hazarilal and Co. : (2003) 263 ITR 679 : (2004) 134 Taxman 384 (MP) and the Madras High Court in R.V.S. and Sons Dairy Farm v. CIT : (2003) 130 Taxman 615 (Mad).