TaxTMI 
TaxTMI 
1956 (2) TMI 80
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....s British India. The assessee has to pay the excise duty imposed by the Government of India on arecanuts, even on those which he had bought in Travancore and brought into the taxable territories. In the accounting year he was assessed to an excise duty which amounted to ₹ 40,174. He also paid it during the accounting year. In the year of account the Travancore State also imposed an excise duty on arecanuts, which amounted in the case of the assessee of ₹ 29,748. On the representations of the dealers in arecanuts, the Government of India ultimately decided to refund the excise duty paid to it by the dealers, who had also been subjected to excise duty by the Travancore State. The assessee maintained his accounts on the mercantile....
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....aled without success to the Assistant Commissioner and to the Tribunal. Though the assessee was granted relief on the basis that he would have to pay ₹ 29,748 to the Travancore State, he has not so far paid the amount. On August 28, 1946, the assessee debited his account with this sum of ₹ 29,748. His accounts were credited again with that amount on September 4, 1946. The explanation of the assessee was that he had sent that amount for payment to the Travancore State through his agent Manickam, but eventually he decided not to pay it then. When these entries were seen by the Income-tax Officer he took proceedings under section 34 of the Income-tax Act and section 15 of the Excess Profits Tax Act, and he issued a notice to the ....
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.... that income had escaped assessment." The Tribunal also recorded : "It is manifest that the item in dispute was left out of the original assessment on the understanding that this amount was due to the Travancore State Government and it was bona fide going to be paid. The subsequent entries in the account books, however, conclusively prove and it was not denied that the assessee had no intention whatsoever of paying the said excise duty to the Travancore State Government....... At the time of the original assessment, one representation was made to the Income-tax Officer which however was subsequently found to be definitely incorrect." It was on the last point that, in our opinion, the Tribunal misdirected itself. The Tribu....
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....he assessee was not what the assessee himself represented. That distinction was obviously lost sight of by the Tribunal when it recorded : "At the time of the original assessment one representation was made to the Income-tax Officer which however was subsequently found to be definitely incorrect." The information that the assessee did not pay the Travancore State was no doubt available to the Income-tax Officer, but that by itself did not lead to any discovery, that by a representation which the Income-tax Officer believed to be true while the assessee knew it was not true, the assessee obtained a relief to which he was not entitled. The assessee, it should be remembered, maintained his accounts on mercantile basis. An ascerta....