- (1.) This appeal has been filed by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 25.9.2008 Annexure-P.3 passed by the Income Tax Appellate Tribunal, Chandigarh (in short, "the Tribunal") for the assessment year 2001-02. It was admitted on 16.3.2009 to consider following substantial questions of law:- "i) Whether the Assessing Officer made an assessment by estimation of income arbitrarily without any reasons or findings ii) Whether the Hon'ble Tribunal was right in estimation of income which is 22 seats per bus without any formula and basis iii) Whether the findings of the Assessing Officer totally based on assumption and presumption are sustainable in the eyes of law -
(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant was the proprietor of M/s Rajdeep Bus Service, Khanna and M/s Ajmer Finance Company. These concerns deal with plying of buses and financing & leasing respectively. During the relevant period, the assessee was maintaining 11 buses for business purposes. The assessee filed statutory return of income for the assessment year 2001-02 and declared total income of Rs. 1,10,940/- and agriculture income of Rs. 1,03,000/- alongwith the audit report. The case was selected for scrutiny as per Board's instructions. Statutory notices under section 143(2) and 142(1) of the Act were issued to the assessee. During the assessment proceedings, the assessee was issued notice under Section 142(1) of the Act on 23.2.2004 and 15.3.2004 to furnish certain details/information/clarification. The assessee did not produce and/or file the information called for in such notices regarding production of books of account, bank pass books, explanation to show cause notices etc. The Assessing Officer while passing best judgment assessment order under Section 144 of the Act enhanced the total income of the assessee for the assessment year 2001-02 to Rs. 19,43,860/-. Addition of Rs. 18,32,740/- was made on the basis of assuming the total occupancy of bus at the rate of 50% of the total capacity of 52 seats available per bus which was taken as 26 seats per bus. The total receipt from all the buses came to Rs. 1,05,90,840/- as against declared receipt of Rs. 77,13,524/-. It was gathered from the transport department that the said department allows breakdown of three days per month. The rebate out of bus fare equal to 36 days (12x3) was allowed and the total receipts were thus assessed at Rs. 95,46,264/-. Accordingly, an addition of Rs. 18,32,740/- was made to the returned income. Aggrieved by the assessment order, the assessee filed appeal before the Commissioner of Income Tax (Appeals). Vide order dated 8.2.2005, Annexure P.2, the CIT(A) deleted the addition of Rs. 18.32 lacs made by the Assessing Officer on the basis of occupancy of 26 seats per bus and directed the Assessing Officer to assess the income as per the books of account which was 19 seats per bus. The revenue filed appeal before the Tribunal. Vide order dated 25.9.2008, Annexure P.3, the Tribunal partly allowed the appeal and estimated the occupancy of seats at 22 per bus. The Assessing Officer issued demand notice dated 17.12.2008, Annexure P.4 of Rs. 1,84,797/- giving effect to the impugned order for recovery of the tax. Hence the instant appeal by the appellant-assessee.
(3.) We have heard learned counsel for the parties.;