1933 (11) TMI 28

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....in the "previous year." The answer to the first question will therefore depend on the view which we take of the point involved in the second question. 2. The learned Commissioner while stating the case has expressed the opinion that from the "attitude" of Joti Parshad and Gajju Mal of the firm of Messrs. Parmeshari Das Kirpa Ram, the Income Tax Officer was justified in drawing the presumption that the interest must have been credited to the petitioner firm as in the preceding year. Now even if it be assumed that such a presumption could be legally made on the materials before the assessing officer, it seems to us that by itself it could not justify the assessment. It is settled law that interest which has accrued due to....

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....e assessee firm or any of its partners, which would justify the presumption which has been made against it by the Income Tax authorities. The assessing officer has stated in his order that the assessee firm had complied with the notices served on it under Sections 22 (4) and 23 (2) of the Act. A return was duly filed by the firm based on its account P.R. Mehra and Co. Accountants and have not been shown to be incorrect in any way. Along with the return was submitted an audit report by Messrs. P.R. Mehra and Co. Accountants and Government auditors, showing a net loss of ₹ 935-1-6 suffered during the accounting period. To the report was added a note by the auditors to the following effect: No interest was charged this year on the amou....

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....Mal, but Joti Prasad was required to produce him with the books. Joti Prasad brought Gajju Mal with him the next day but be was not examined on oath. Mr. Jagan Nath says that the record merely contains a note by the Income Tax Officer that Gajju Mal had stated that the books were not with him, and that it does not show that any question was put to Gajju Mal as to whether the firm of Parmeshari Das Kirpa Ram had paid the assessee firm interest on the loan of ₹ 5,34,931-8-0 during the accounting period. Mr. Jagan Nath was constrained to admit that in this state of the record there is no evidence at all to contradict the statement of Joti Prasad that the books of the debtor firm were with Gajju Mal, and in any case the Income Tax Officer....