TaxTMI 
TaxTMI 
1955 (8) TMI 42
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....and refer the following questions of law alleged to arise out of their order:- (1) "Whether on the facts and in the circumstances of the case there was any material to justify the estimate of income at Rs. 40,000?" (2) "Whether on the facts and in the circumstances of the case, there being no instance of any purchase or sale outside the books there was any justification for rejecting the book results and estimating the income at Rs. 40,000?" and (3) "Whether on the facts and in the circumstances of the case the Tribunal had jurisdiction to base its decision on a new point not urged by the Income-tax Officer either in the assessment order before the Appellate Assistant Commissioner or in his grounds of appeal befor....
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.... or if the method employed is such that in the opinion of the Income-tax Officer the income, profits and gains cannot properly be deducted therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine." This argument, if we may say so, is based upon a misconception. The Income-tax Officer did not act at all under the aforesaid proviso. The order of the Income-tax Officer shows that he did not accept the accounts and he has given various reasons for not doing so. After giving his reasons he observed: "For the foregoing reasons, I am unable to accept that the accounts produced by the assessee are a complete and correct record of his business and that they reflect his true ....
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....I consider that the Income-tax Officer was justified in not accepting the very low profit of Rs. 2,469. But the determination of the income at Rs. 65,000 is far too high. By fixing the income at Rs. 65,000 the Income-tax Officer has enhanced the gross rate of profit to 15% or so which is an unheard of thing. Taking therefore the general trade conditions and the rate of profit derived in the account year into consideration, I consider that a reasonable estimate would have been Rs. 25,000 and substitute this for the sum of Rs. 65,000 determined by the Income-tax Officer." The Income-tax Appellate Tribunal also gave convincing reasons for their estimate. As regards the registers kept by the assessee, they did not give any weight to them on ....
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....ags shown to have been milled by him. They did not accept even the 37,138 bags shown in the accounts for it differed from the figure given by the assessee in the statement furnished to them. On that basis they came to the conclusion that the unexplained extra and heavy carting and weighing coolies taken with the excess consumption of fuel oil, showed that more paddy had gone into the mill than what the assessee had chosen to show. Finally they concluded their order with the following remarks: "Taking into consideration the number of bags said to have been milled and the fact that the assessee was the owner of the mill and as such there was no rent to be paid, the net income of Rs. 2,469 is absurdly low. In view of our findings that....