Reliability of accounts determines proviso applicability; limited appellate review upheld Tribunal's factual finding and result.

Whether the proviso to the Income-tax Act applies was treated as essentially factual: the determinative issue is the reliability of the taxpayer's accounts for computing income. The Tribunal relied on wholesale trading indicators and the taxpayer's access to import quotas alongside an unexplained fall in profit margin to infer unreliability. The legal principle applied is that appellate interference is limited to whether any material supports the Tribunal's factual finding; the Tribunal gave relevant reasons and there was material to uphold application of the proviso, so the appellate challenge failed.

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Issues: Whether the proviso to section 13 of the Income-tax Act, 1922 was correctly held by the Tribunal to be applicable to the appellant's trading results, and whether there was any material to support the Tribunal's factual finding.

Analysis: The Tribunal relied on (i) the wholesale nature of the business creating an expectation that quantities of major trading items could be tallied and (ii) the appellant's access to import quotas worth about Rs. 8,00,000 which would normally yield higher profit margins. These facts were treated as relevant to determine whether income, profits and gains could be properly deduced from the appellant's method of accounting. The legal question whether the proviso to section 13 applies is in substance a question of fact - namely, whether the accounts are reliable for computing income - and the only permissible appellate review is whether there is any material supporting the finding. The Tribunal's reasons addressed relevant factual considerations bearing on the reliability of the accounts and the unexplained fall in profit margin compared with earlier years.

Conclusion: There was material in support of the Tribunal's finding that the proviso to section 13 applied; the High Court was correct in refusing to call for a statement of the case and the appeal is dismissed.

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