TaxTMI 
TaxTMI 
1980 (2) TMI 35
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....me of Rs. 76,559. The ITO rejected the books of the assessee in all the four vends mainly because the rates of sales at which liquor was sold at all the four vends were not verifiable and correct. Accordingly, considering the sales at each of the four vends separately, the ITO computed the total income at Rs. 1,36,966. The assessee filed an appeal to the AAC who granted total relief of Rs. 15,614 against the addition of Rs. 58,036. The assessee filed an appeal before the Income-tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as " the Tribunal"). The Tribunal sustained an addition of Rs. 25,082 and allowed a relief of Rs. 17,339 to the assessee. While deciding the appeal, the Tribunal found as follows in para. 3 of it....
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....of G.P. works out to 3.7%. This rate is actually less than the rate shown by the assessee itself from Sareen shop and Dholewal shop. We are, therefore, not inclined to disturb the addition made in this account also. In Dholewal shop the rate of G.P. disclosed is 3.97%. Two additions have been made, one is of Rs. 11,921 on account of breakages. The assessee claimed breakages of 1,630 full, 459 half and 189 quarter bottles and as the breakages were not properly proved the Income-tax Officer allowed roughly half the breakage and made an addition for the balance half valued at Rs. 11,921. Half of the breakage comes to 815 full, 230 half and 94 quarter bottles and by taking the value at Rs. 10, Rs. 5 and Rs. 3, respectively, the breakage would b....
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....) of the I.T. Act, 1961 (hereinafter referred to as " the Act "), cannot be made applicable in this case. The provisions of s. 145 of the Act are as follows : " 145. (1) Income chargeable under the head 'Profits and gains of business or profession' or 'Income from other sources' shall be computed in accordance with the method of accounting regularly employed by the assessee : Provided that in any case where the accounts are correct and complete to the satisfaction of the Income-tax Officer but the method employed is such that, in the opinion of the Income-tax Officer, the income cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine. (2) Wh....
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....ly come into play if the accounts of the assessee are found to be correct and complete and from those facts mentioned in the accounts, the income cannot be properly deduced. In the present case, the Tribunal did not believe the accounts of the assessee regarding the sale price of the liquor. In view of what has been stated above, we are of the opinion, that question No. 1 referred to us has to be answered in the negative, i.e., in favour of the assessee and against the revenue. We order accordingly. In view of our answer to question No. 1 we do not deem it proper to answer question No. 2, as in our view the Tribunal, which was seized of the appeal filed by the assessee, looked at the material on the record keeping in view the provisions ....