Appellate power under the Income-tax Act allowed a different computation method and use of account books for assessment.

The appellate authority under Section 31 of the Income-tax Act, 1922 had wide power to interfere with the Income-tax Officer's method of computation. An assessment made on a flat-rate or other basis under the proviso to Section 13 was not immune from appellate scrutiny, and the assessee had no absolute right to insist on one method over another. The Assistant Commissioner could examine whether profits were deducible from the account books and, under Section 31(3), confirm, reduce, or enhance the assessment. A prior call for a report did not divest appellate jurisdiction by amounting to a final remand.

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Issues: Whether the Assistant Commissioner, in appeal, had jurisdiction to substitute a different method of computation for the method adopted by the Income-tax Officer, including by discarding the flat-rate basis and determining profits from the account books.

Analysis: The appellate power under Section 31 of the Income-tax Act, 1922 was wide enough to permit interference with the Income-tax Officer's method of computation. The proviso to Section 13 did not make the basis adopted by the Income-tax Officer immune from appellate scrutiny. Although the assessee could not insist as of right on one method of computation over another, the higher departmental authority was not restricted from examining whether profits could be deduced from the books. The Assistant Commissioner was also empowered under Section 31(3) to confirm, reduce, or enhance the assessment, and his earlier call for a report did not amount to a final remand depriving him of jurisdiction.

Conclusion: The question was answered in the affirmative. The Assistant Commissioner had jurisdiction in appeal to alter the method of computation and to determine the income on the basis of the account books.

Ratio Decidendi: The appellate authority under the Income-tax Act, 1922 may interfere with the Income-tax Officer's method of computation, including an assessment made under the proviso to Section 13, and may adopt a different method within its wide powers under Section 31.

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