Stock discrepancy income must be measured by the relevant accounting year, not a later bookkeeping date.

Suppressed income from stock discrepancies must be computed with reference to the relevant previous year and the accounting period ending on 7 April 1957. A later stock tabulation date of 8 April 1957 could not be substituted merely because the assessee's books extended to that date, as any transactions on that day would fall in the next assessment year. The proper comparison was therefore between the assessee's books and the bank's pledged stock account as at 7 April 1957, and the discrepancy had to be worked out on that basis.

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Issues: Whether, in determining suppressed profits from the discrepancy between the assessee's stock books and the bank's pledged stock account, the income-tax authorities were right in taking the stock position as shown in the assessee's books on 8 April 1957 instead of 7 April 1957.

Analysis: The relevant accounting year ended on 7 April 1957, and the suppressed income had to be worked out with reference to that period. Although the assessee had tabulated its stock position up to 8 April 1957, that circumstance did not alter the relevant previous year for the assessment year in question. Any income from transactions on 8 April 1957 would fall in the subsequent assessment year. Since the bank's stock position was the same on both dates, the material discrepancy for the relevant year had to be computed by comparing the assessee's books as on 7 April 1957 with the bank's account.

Conclusion: The authorities were required to take the assessee's stock position as on 7 April 1957, not 8 April 1957, and the question was answered in the negative, in favour of the assessee.

Ratio Decidendi: Suppressed income must be determined with reference to the stock position and accounting period of the relevant previous year, and a later date outside that year cannot be used merely because the assessee's books were tabulated up to that date.

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