JUDGMENT
J.S. Verma, Actg. C.J.
1. This is a reference at the instance of the asses-see, under Section 256(1) of the Income-tax Act, 1961, for answering the following questions of law, namely :
” (i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in not applying a net profit rate on both the passenger hire and luggage hire receipts, thereby deviating from the method of determining income adopted consistently in the case of the assessee in earlier years ?
(ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the entire expenses claimed by the assessee were met from passenger hire receipts only and that the luggage receipts were available without any expenses ? ”
2. The material facts are these. The assessee is a, registered firm earning its income from plying buses. For the assessment year 1974-75, the assessee filed a return declaring an income of Rs. 3,714 only from its business. The assessee showed the passenger receipts at Rs. 95,448 and luggage receipts at Rs. 98,332, i.e., the gross receipts at Rs. 1,93,780. As against this amount, the total expenses shown by the assessee was Rs. 1,90,066 resulting in an income of Rs. 3,714 only from the business of plying buses. The Income-tax Officer, on a scrutiny of the account books, found serious irregularities and he rejected them and made a best judgment assessment in accordance with Section 145(2) of the Act. The Income-tax Officer estimated the passenger receipts at Rs. 1,50,000 and the luggage receipts at Rs. 98,332. The Income-tax Officer computed profit at the rate 221/2% on the passenger receipts and did not allow any deduction on account of expenses against the luggage receipts, the total of which was added to the income from the passenger receipts. The assessee’s appeal to the Commissioner of Income-tax (Appeals) partly succeeded inasmuch as the deduction of Rs. 9,000 against the passenger receipts and Rs. 3,000 against the luggage receipts, or in all, a deduction of Rs. 12,000 was granted. The further appeal of the assessee to the Tribunal has failed. Aggrieved by the view taken by the Tribunal, the assessee applied for a reference of the aforesaid questions to this court as a result of which these questions came up for decision before us.
3. It may be mentioned at the outset that the decision of making the test judgment assessment after rejecting the assessee’s books of account in accordance with Section 145(2) of the Act is not in controversy at this stage and, therefore, the only question is whether the best judgment assessment actually made gave rise to the above questions of law on the facts found proved by the Tribunal. In our opinion, there is no ground for holding that the Tribunal’s conclusion was unjustified.
4. The learned counsel for the assessee strenuously urged that during the earlier years, passenger receipts and luggage receipts were clubbed and the profit rate was applied to both of them ; whereas, during the relevant year in question, they were not clubbed and the profit rate of 221/2% has been applied only to the passenger receipts and not to the luggage receipts against which a deduction of Rs. 3,000 alone has been given towards expenses. In our opinion, nothing significant resulted from this position. The clear finding is that the assessee was not required to incur any additional expenses except probably payment of some coolie charges for earning the luggage receipts in addition to the expenses incurred for earning the passenger receipts. On this basis, no separate deduction on account of expenses in addition to the deduction given for expenses against the passenger receipts was called for and the deduction of Rs. 3,000 was given against the luggage receipts even then to cover any possible additional expenditure by way of coolie charges, if any, paid by the assessee to earn the luggage receipts. On these findings of fact, the conclusion reached by the Tribunal is fully justified and there is really no principle of law arising for application to reach the ultimate conclusion. Both these questions are, therefore, to be answered against the assessee.
5. Consequently, this reference is answered against the assessee and in favour of the Revenue as under :
” (1) The Tribunal was justified in not applying a net profit rate to the luggage receipts also.
(2) The Tribunal was justified in holding that the expenses claimed by the assessee against the luggage receipts were covered by the expenses allowed against the passenger receipts. ”
6. The assessee shall pay the costs of this reference. Counsel’s fee Rs. 200, if certified.