Law: Income Tax Act, 1922

Section: 13

Income-tax Act (XI of 1922)---S. 13-Income-tax-Propositio that unless Income-tax Officer can find any defects or flaws in Account Books, he must accept them as they are even though circumstantial evidence may suggest some of entries therein being inaccurate- or unreliable-Held, baseless. S. M. Yousaf v. Commissioner of Income-tax 1974 P T D 45 and Sultan Textile Mills Ltd. v. Commissioner of Income-tax 1970 P T D 878 and Miss Assia v. Income-tax Appellate Tribunal P L D 1979 S C 949 ref. JUDGMENT SAAD SAOOD JAN, J.-This reference is by an assessee under section 66 (1) of the Income-tax Act. It has formulated three questions for the decision of this Court. These are: - (1) Whether on facts and in the circumstances of the case the Tribunal was right in maintaining the rejection of book version of the assessee without having found any fault or flaw with the books of account or method of accounting employed by the assessee and whether the recourse to the first proviso to section 13 of the Income-tax Act has been rightly made? (2) Whether on facts and in the circumstances of the case there was any material on the basis of which it was open to the Appellate Tribunal to enhance the assessee's yield by 85% and thus uphold the additions ­of Rs. 2,84,394? (3) Whether on facts and in the circumstances of the case the Appellate Tribunal was right in holding that a sum of Rs. 98,715 remitted by the assessee through normal banking channel by way of commission non-resident foreign agents for service performed abroad in relation to sale was not admissible deduction on account of the assessee's failure to deduct tax under the provision of section 10 (4) (bb) of the Income-tax Act, 1922 and for want of formal agreement? During the course of hearing, learned counsel appearing for the assessee confined his address to the first two questions' only. We, therefore, presume that it is no longer interested in the third question. 2. Questions Nos. 1 and 2 are inter-connected. They relate to yarn ­production account of the assessee for the assessment year 1967-58. It may be stated that the assessee is a public limited company engaged in the manufacture of yarn and cloth. For the year in…

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