Law:

Section:

Section 254, read with section 256 of the Income-tax Act, 1961 - Appellate Tribunal - Order of - Assessment year 1965-66 - Whether a question of law can be said to arise from Tribunal's order only when consideration of that question was necessary for disposing of appeal before Tribunal - Held, yes - Whether, therefore, where assessee raised a contention consideration of which was unnecessary for disposing of appeal, fact that said contention had not been considered would not give rise to a question of law which could be said to arise from Tribunal's order - Held, yes FACTS For the relevant assessment year, the books of account of the assessee were rejected and an estimate was made by the ITO. It was clear from the assessment order, that the estimate was based on the "normal gross profit rate obtainable in such business. The normal gross profit rate obtainable in such business was ascertained by the ITO on the basis of the percentage of profit disclosed by two assessees whose names had been mentioned in the assessment order and styled as a comparable cases. On appeal before the AAC, the assessee contended that this data collected by the ITO had not been disclosed to the assessee and, therefore, there had been violation of the principles of natural justice and the provisions of section 142(3), and hence, the order should be set aside. This contention as such had not been dealt with by the AAC but it appeared that the AAC chose to rely on the percentage of profit disclosed by the assessee for the previous year of assessment which was 10 per cent. and rested his decision and sustained the addition on that ground alone. There was a further appeal before the Tribunal by the assessee and the main contention that was raised before the AAC was again taken before the Tribunal. Nevertheless the point had not been dealt with in the Tribunal's order. It only considered whether the percentage determined by the AAC confirming the order of the assessing authority was justifiable or not on other material that was available. It relied on the fact that the assessee himself had returned 10 per cent profits in the previous year. It considered the explanation given by the assessee…

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