Section 145, read with section 263, of the Income-tax Act, 1961 - Method of accounting

IT : Where Assessing Officer rejected books of account and estimated net profit on gross receipts, Commissioner could not invoke revisional power
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[2015] 53 taxmann.com 51 (Patna-Trib )
IN THE ITAT PATNA BENCH
Gopal Narayan Singh
v.
Deputy Commissioner of Income-tax*
H.S. SIDHU, JUDICIAL MEMBER
AND B.P. JAIN, ACCOUNTANT MEMBER
IT APPEAL NO. 10 (PAT.) OF 2012
[ASSESSMENT YEAR 2007-08]
JULY  4, 2014
Section 145, read with section 263, of the Income-tax Act, 1961 - Method of accounting - Rejection of accounts (Revision) - Assessment year 2007-08 - Assessing officer estimated net profit of assessee at 5.58 per cent of gross turnover from civil contract work - Commissioner invoked section 263 alleging that there was inability to produce evidences in support of assessee's claim of expenses and profit - It was found that in opinion of Assessing Officer, books of account were not reliable and, accordingly, he rejected books of account and estimated said profit of his own - Whether Commissioner could not invoke section 263 by mentioning that no proper enquiry had been made by Assessing Officer when nothing had been brought on record by Commissioner - Held, yes - Whether, therefore, Commissioner was not justified in cancelling assessment order - Held, yes [Para 5] [In favour of assessee]