Appellate power to enhance assessment includes changing the profit basis and computation rate under income-tax review.

An assessment made under the proviso to section 13 was treated as subject to appellate scrutiny, so the Income-tax Officer's chosen basis of computation was not immune from review. The appellate authorities' powers under sections 31 and 32 were construed broadly enough to examine whether the method and percentage rate adopted for profit computation were proper. Where the statute confers power to enhance an assessment, that power extends to altering the basis or rate applied to sales in computing income. The Assistant Commissioner and the Commissioner therefore had authority to change the profit basis and increase the percentage rate.

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Issues: Whether, in an assessment made under the proviso to section 13, the Assistant Commissioner and the Commissioner had authority to alter the Income-tax Officer's basis of profit and enhance the percentage rate adopted for computation.

Analysis: The proviso to section 13 was held to confer discretion on the Income-tax Officer as to the basis and manner of computation, but not to make that basis immune from scrutiny in appeal. The appellate powers under sections 31 and 32 were construed broadly. It was accepted that where the Income-tax Officer adopts a permissible method, the higher departmental authorities may still examine whether the method or percentage used is proper and may substitute a different basis if the statute empowers enhancement of the assessment. The power to enhance an assessment was treated as wide enough to include alteration of the rate applied to sales when that is the method chosen for computing income.

Conclusion: The Assistant Commissioner and the Commissioner did have authority to change the basis of profit and enhance the percentage rate.

Ratio Decidendi: An assessment made under the proviso to section 13 is subject to appellate interference, and the appellate authorities may enhance the assessment by altering the basis or rate of computation where the Income-tax Act confers wide powers of review and enhancement.

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