Unsupported yield estimates in income tax cannot survive when additions rest on conjecture rather than evidence.

Income-tax additions for alleged shortage in oil and oil-cake yield were found unsustainable because the estimated normal yields and refraction rested on prior assessments and local practice, without scientific data or other reliable evidence. The account books were not rejected, the seed quality for the relevant year was not shown to be comparable with earlier years, and the estimation lacked a proper evidentiary basis. In a reference under section 66(2), a finding may be interfered with when it is based on no evidence, inadmissible material, or is perverse. The additions were therefore set aside and the referred questions answered in the negative.

---

---

Issues: Whether the additions made on account of alleged shortage in oil and oil-cake yield were justified on the materials on record, and whether the estimated yields and refraction could be sustained as a question of law under section 66(2) of the Income-tax Act, 1922.

Analysis: The assessment was founded on assumed normal yields of 32% oil, 66% oil-cake, and 2% refraction, supported only by prior assessment figures and local practice, without scientific data or other reliable material. The account books were not rejected, the quality of the seeds for the relevant year was not shown to be comparable with earlier years, and the different authorities relied on different and insufficient grounds. In a reference under section 66(2), a finding may be interfered with where it is based on no evidence, on inadmissible material, or is perverse. Section 13 of the Income-tax Act, 1922 also requires computation in accordance with the regular method of accounting unless the Officer can properly determine otherwise; here, the estimates were not shown to rest on a proper evidentiary basis.

Conclusion: The additions were not justified, and the answers to the referred questions were in the negative.

Final Conclusion: The assessment additions on account of alleged shortage of oil and oil-cake yield were set aside as being unsupported by material, leaving the assessee successful in the reference.

Ratio Decidendi: A factual estimate in income-tax proceedings is open to interference where it is based on no evidence, irrelevant material, or pure conjecture rather than a legally sustainable evidentiary foundation.

---