Law:

Section:

I. Section 5 of the Income-tax Act, 1961 - Income - Accrual of - Assessment year 1985-86 - During assessment proceedings for relevant assessment year, Assessing Officer found that assessee-company had received a sum in US dollars on 16-4-1985 as agency commission from a Japanese company but same had not been entered in its books of account - Assessee denied having received such commission on such date - Its case was that it was not having any knowledge as to amount of commission having been received by its managing director 'R' on that date; and that it had returned said amount as income in assessment year 1988-89 on basis of actual receipt of said amount from 'R' - Whether payments being under agreements with foreign companies and receipt of payments having been acknowledged by authorized person of assessee-company, it was possible to accept that assessee-company had no knowledge of fact that amount of commission had already been received by its authorized agent - Held, no - Whether, therefore, amount of commission was taxable in hands of assessee in relevant assessment year - Held, yes II. Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of profit - Assessment year 1981-82 - Assessing Officer made addition of certain sum to income of assessee on account of sale of scrap outside its books - Commissioner (Appeals), while holding that state of record maintained by assessee was not foolproof so as to allow Assessing Officer to properly deduce correct income, sustained a token addition to extent of around 10 per cent of income on account of sale of scrap - Whether, on facts, Tribunal was right in upholding order of Commissioner (Appeals) - Held, yes FACTS-I During the assessment proceedings for the relevant assessment year, the Assessing Officer found that the assessee-company had received a sum in the US dollars on 16-4-1985 as agency commission from a Japanese company but same had not been entered in the books of account of the assessee. The assessee, however, denied receiving such commission on said date and contended that it had received said amount from its managing director 'R' on 4-5-1987 which had been credited to the company's…

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