Law:

Section:

Section 254, read with section 144, of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1976-77 - While completing best assessment of assessee, a sugar manufacturer, ITO estimated gross profit on turnover figure as available with Commercial Tax Department -. On appeal before Tribunal, assessee contended that taxable Income should have been estimated by reference to assessment order passed under Sales-tax Act as entire turnover was not taxable under said Act - Assessee's prayer to look into assessment order under Sales-tax Act was turned down by Tribunal - Whether Tribunal should have admitted assessment order of Commercial Tax Officer in evidence and examined same on merits - Held, yes Section 144 of the Income-tax Act, 1961 - Best assessment - Whether best assessment ought to be based on a fair and proper estimate of assessee's income and inferences to be drawn from material should be properly inferable inferences - Held, yes FACTS The assessee was a sugar mill. For the assessment year 1976-77, the ITO obtained figures pertaining to the turnover of the assessee from the Commercial Tax Department. From this he estimated the gross profit and from that he inferred the taxable income as 25 per cent of the turnover. The ITO also referred to the previous year's assessment records. The assessee appealed to the Commissioner (Appeals) and along with the appeal memo enclosed the order of assessment passed by the Commercial Tax Officer under the provisions of the Karnataka Sales-tax Act, 1957. According to the assessee, the figures relatable to the turnover furnished by the Commercial Tax Department would not convey a proper figure of the assessee's turnover resulting in its income because under the provisions of the Sales-tax Act a taxable turnover was confined to sugarcane purchased by the assessee; but the sugar as such was not taxed. According to the assessee a fair and proper estimate of the taxable income of the assessee could be made by looking into the assessment order under the said Act, which would disclose the turnover which was taxed and which was not taxed thereunder. The Commissioner rejected the prayer of the assessee to look…

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