TaxTMI 
TaxTMI 
1959 (9) TMI 54
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.... called Telaya. In the last accounting year the assessee also carried on work at Panchait Dam. For the assessment year 1951-52 the Income-tax Officer wrote as follows: "The above contract was for excavation of sites for Telaya Dam and Power House. The assessee has maintained one consolidated profit and loss account from the beginning of the work, i.e., from December, 1950, to March 31, 1952. This account is for about 19 months. Net profits as per assessee's books of account comes to Rs. 30,076. On the basis of receipts during 1950-51 and 1951-52, the assessee has filed returns for 1951-52 and 1952-53 assessment showing the income of Rs. 7,000 and Rs. 30,076 respectively. The assessee has received the following amounts in those two ye....
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.... be assessed on the receipt of Rs. 54,668 only from the Telaya Dam." The result was that in all these cases the books of the assessee were rejected by the Income-tax Officer and the profits estimated under the proviso to section 13 of the Income-tax Act. The assessee then took the matter in appeal to the Appellate Assistant Commissioner but the appeal was dismissed by the Appellate Assistant Commissioner, who held that the proviso to section 13 of the Income-tax Act was properly applied to the case and that the rate of 15 per cent, adopted by the Income-tax Officer was a reasonable rate. The matter was then taken before the Appellate Tribunal and the argument put forward by the assessee was that the proviso to section 13 of the Income-ta....
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....done by the assessee at Konar and Telaya Dams and the Tribunal had lost sight of the distinction between the work done at Konar Dam and the work done at Telaya Dam, because materials were supplied to the assessee for execution of the work at Konar Dam but not for the Telaya Dam. This point does not appear to have been taken before the Income-tax Tribunal at the time of the hearing of the appeals. The argument was, however, advanced before the Tribunal at the time when the application was made to the Tribunal under section 66(1) of the Income-tax Act for making a reference to the High Court. In rejecting this argument the Tribunal has observed that the orders of the Income-tax Officer and the Appellate Assistant Commissioner sufficiently ind....
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.... there is a method of accounting regularly employed by the assessee, is not a correct view. It is the duty of the Income-tax Officer, where there is such a method of accounting to consider whether income, profits and gains can properly be deduced therefrom, and to proceed according to his judgment on this question. It is clear that the Income-tax Officer acted on the same view as that expressed by the Assistant Commissioner, and did not perform the duty above stated. The case of Commissioner of Income-tax v. Ahmedabad New Cotton Mills Co. Ltd. [1928] LR 57 IA 121is of no assistance on the present question." The principle has been applied by a Bench of this court in Sri Sukhdeodas Jalan v. Commissioner of Income-tax [1954] 26 ITR 617 , wh....