CAF-2 · Chapter 15 · Question 4 of 15
If a taxpayer fails to produce books of accounts during an audit, how may the Commissioner determine the taxable income for making a Best Judgment Assessment?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) On the basis of sectoral benchmark ratios prescribed by the Board.
Explanation
For the purposes of making a best judgment assessment, the Commissioner may determine taxable income on the basis of sectoral benchmark ratios prescribed by the Board (e.g., gross profit ratio, net profit ratio, wastage ratio, etc.).
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