| Case ID |
1fc6eff4-0424-41c4-ba87-1681095b108c |
| Body |
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| Case Number |
IT REFERENCE No. 81 OF 1962 |
| Decision Date |
May 02, 1967 |
| Hearing Date |
|
| Decision |
The Tribunal's decision to add Rs. 65,000 to the profits shown by the assessee was found to be unreasonable and not made in a judicial exercise of discretion. The court emphasized that the authorities must not make arbitrary estimations but should rely on relevant materials. The court concluded that the sales and purchases were properly vouched, and thus the addition to the profits lacked a basis. The decision favored the assessee, indicating that an objective assessment of profits should be made, rather than crude guesswork. The court also noted that the Tribunal failed to properly justify the addition based on the historical profit margins, leading to a decision that did not adhere to the legal standards required for such estimations. |
| Summary |
In the case of Bajrangbali Engineering Co. (P) Ltd. vs. Commissioner of Income Tax, the Calcutta High Court addressed issues surrounding the estimation of profits under Section 145 of the Income-tax Act, 1961. The court found that while the sales and purchases were properly documented, the profits could not be accurately deduced due to unreliable accounting practices. The Tribunal's addition of Rs. 65,000 to the profits without substantial evidence was deemed arbitrary. The judges highlighted the necessity for revenue authorities to exercise discretion judiciously, based on actual data and historical profit ratios. This case underscores the importance of reliable accounting in tax assessments and the judicial standards required for profit estimations. Keywords: Income Tax Act, profit estimation, judicial discretion, accounting reliability, Calcutta High Court. |
| Court |
Calcutta High Court
|
| Entities Involved |
Not available
|
| Judges |
Banerjee, J.,
Masud, J.
|
| Lawyers |
S.K. Achariya,
A.K. Sinha,
B.L. Pal,
B. Gupta
|
| Petitioners |
Bajrangbali Engineering Co. (P) Ltd.
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1967 SLD 500 = (1967) 66 ITR 82
|
| Other Citations |
CIT v. K.Y. Pilliah & Sons [1967] 63 ITR 411 (SC),
CIT v. Sarangpur Cotton Manufacturing Co. Ltd. [1938] 6 ITR 36 (PC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
145
|