Law: Income Tax Act, 1922

Section: 66(2),13,10,12

Rejection of accounts -- Assessee manufacture of vacuum flask -- I.T.O. rejected books of account saying that percentage of wastage was high and same had not been reconciled by quantitative details -- I.T.O. reaching conclusion that co-relation between consumption and production had not been established and no stagewise day-to-day production record was maintained -- I.T.O. relied upon a parallel case in which in same year a high gross profit rate was declared and consequently higher G.P. rate applied -- Income Tax Appellate Tribunal failed to point out any specific defect in maintenance of accounts and failed to establish that correct profit was not deductible from the books of account -- No material pointed out to show that wastage claimed by assessee was unjustified in any way -- Whether Tribunal was bound to accept book version of assessee in circumstance of the case -- Held yes -- Reliance on a parallel case -- Whether justified as conditions of work might not be same as in case of assessee -- Held no -- Assessment -- Assessee, manufacturer of vacuum flask and his income exempt from tax in previous years -- Wastage -- Income-tax Officer had not scrutinized their accounts, figures or accounts of previous years -- Such figures and accounts, held, could not be considered relevant for purpose of present year and it could be urged that Income-tax Authorities had not challenged accounts or figures of previous years -- Reference -- Assessment -- Assessee manufacture of vacuum flask -- Wastage -- Income-tax Officer rejecting version of accounts of assessee on ground that his percentage of wastage as very high and that same had not been reconciled by quantitative details -- Income-tax Officer reaching conclusion that co-relation between consumption and production had not been established and no stagewise day-to-day production record had been maintained -- Income-tax Officer relying upon a parallel case in same year in which a high gross profit was declared and consequently fixed gross profit in respect of assessee at a higher rate than shown by him -- No material existed for rejecting percentage of wastage and decreasing same -- Income-tax Appellate Tribunal also…

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