Law:

Section:

Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of profit - Pursuant to a survey of assessee's shop and factory premises, Assessing Officer observed a number of defects in books of account maintained by assessee - Relying on specific defects, Assessing Officer invoked provisions of section 145(2) and on basis of entire facts relating to assessee's business, various defects in books of account and statements of persons available on spot during survey, made an estimate of profit - Whether conclusion arrived at by Assessing Officer and confirmed by Tribunal could be said to be based on material on record - Held, yes Section 260A of the Income-tax Act, 1961 - High Court, appeal to - Whether sufficiency or adequacy of evidence necessary for reaching conclusion of fact does not give rise to a question of law much less a substantial question of law - Held, yes FACTS The assessee was engaged in manufacture and sale of sweets and namkeen. During a survey of the shop and factory premises of the assessee under section 133A, the assessing authority observed a number of defects in the books of account maintained by the assessee. Relying on specific defects, the Assessing Officer invoked the provisions of section 145(2) after giving specific opportunity to the assessee. The assessee was confronted with the entire material before the assessing authority. The Assessing Officer on the basis of the record and the statements of the various karigars and salesmen made the addition to the trading results declared by the assessee. On appeal, the Commissioner (Appeals) reduced the estimation of sales and also the gross profit to a great extent. On further appeal, the Tribunal considered all the contentions raised in depth and detail and dismissed the appeal. On appeal under section 260A : HELD A competent income-tax authority can inspect the business premises and record the statements under the provisions of section 133A. Such an authority cannot demand collection of tax on the alleged undisclosed income then and there. Such an authority is required to send the statement or the material collected to the Assessing Officer if he himself is not the income-tax…

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