1975 (3) TMI 2

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....Arhatwalla, was a branch of the assessee-firm. Accordingly, he included the income of that firm in the hands of the assessee-firm for those years. During the assessment proceedings for the year 19 52-53, the year under reference, the Income-tax Officer on the basis of the past records intended to include the income of the branch firm in the income of the assessee-firm. The account books of the branch firm were not produced by the assessee-firm on the ground that the business was closed and, therefore, the books were not easily available. But Subhkaran Jhunjhunwalla had returned an income of Rs. 55,416 as his share in the profits of the branch firm on the basis that he had a one-anna shaer therein. The Income-tax Officer estimated the inc....

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....he appellant thereafter filed an application in the High Court of Calcutta under section 66(2) of the Act praying that the Tribunal be asked to refer the two questions to the High Court. The High Court granted a rule on that application but discharged it without a speaking order. This court gave to the appellant special leave to appeal frorn the order of the High Court. The two questions on which the appellant sought reference to the High Court are these : "(1) Whether,on the facts and in the circumstances of the case, in holding that the total income of the assessee from the firm of Radhakissen Nandlal Arhatwalla which was to be included in the assessee's assessment for the assessment year 1952-53 was only. Rs. 75,000, the Tribunal m....

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.... the branch firm for the relevant year being Rs. 58 lakhs odd, the Tribunal thought that it did not stand to reason that even though the advances made for the relevant year were less than the advances made for the assessment year 1951-52, the profits of the relevant year could be estimated at nearly Rs. 9 lakhs, that is to say, 9 times more than the profits for the year 1951-52. This seems to us prima facie conjectural because the profits derived from a business does not depend wholly on the amount of capital employed in the business. The capital employed in the business can at best be one of the circumstances to be taken into account for estimating the profits of the business but that circumstance cannot be conclusive. The assessee did not....