Law: Income Tax Act, 1922

Section: 13,proviso,66,31(2B)

Law: Income Tax Act, 1922

Section: 13,proviso,66,31(2B)

Income-tax Act, 1922 -- Section 13 proviso -- Rejection of accounts -- Manufacturer of bars, etc. -- Stock register and day-to-day manufacturing register not maintained as in the past, being neither feasible nor practicable -- Low profit rate as compared to preceding year -- Profit rate deductible from the method of accounting adopted -- Account books, whether liable to be rejected -- Held no -- Word "Opinion", meaning of -- Admission of new documentary evidence -- Statement prepared from account books already produced before Assessing Officer -- Does not constitute fresh material for purposes of S. 31(2-B) -- Stock books -- Material in transit -- Not material actual in hand and therefore cannot be properly included in stock in hand -- Opinion of Income-tax Officer -- Proviso does not give Income-tax Officer arbitrary, unguided, uncontrolled or naked power -- Line of business of assessee such that it was not practicable to maintain regular stock register or a manufacturing account -- Assessing authorities in previous year accepting method of accounting adopted by assessee and had found it possible to deduce and determine rate of profit of assessee -- Assessee's method of accounting in subsequent year cannot be rejected -- Mere fact that assessee chose to charge a low rate of profit -- No ground for rejecting profit as stated in return filed by assessee -- Nor absence of stock register (when assessee never used a stock register) any ground justifying assumption of Income-tax Officer that profits cannot be properly deduced from the return submitted -- JUDGMENT The judgment of the court was delivered by Z.A. CHANNA J.---The following question has been stated by the Income-tax Tribunal for the decision of the High Court under Section 66 of the Income-tax Act, 1922:- "Whether on the facts and circumstances of this case the Income-tax authorities were justified in applying the proviso to Section 13 of the Income-tax Act?" The assessee is engaged in the business of manufacturing bars, etc. from scrap iron and billets. In respect of the charge 1953-54, corresponding to the calendar year 1952, the assessee filed a return showing total sales of Rs. 12,22,486 and gross…

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