Case Law Details
CIT Vs Srinivasan Devendran (Madras High Court)
In the case of CIT Vs Srinivasan Devendran, a civil contractor’s income estimation became a subject of contention. The Assessing Officer determined the income at 8%, but the Commissioner (Appeals) scaled it down to 4%, and the Tribunal upheld this decision.
The primary issue revolved around income estimation, which falls under factual determination rather than a question of law. The Tribunal considered previous assessment orders where the assessee had estimated 3% net profit and justified it based on higher work volume and competition in civil contracts. As a result, the Commissioner (Appeals) reduced the net profit estimation to 4%, which the Tribunal affirmed.
The Madras High Court dismissed the Tax Case Appeal, upholding the Tribunal’s decision. Since no challenge was made to the estimate being arbitrary or perverse, the Court confirmed the 4% profit estimation based on previous assessment orders, as done by the Commissioner (Appeals).
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
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