Law: Income Tax Act, 1922

Section: 13

Income-tax Act (XI of 1922)---S. 13 Proviso--Rejection of book results--Income-tax Authorities and Appellate Tribunal have to appreciate assessee's case in the right perspective and not to ignore explanation of assessee, which had a direct bearing upon the reasonableness or otherwise of the grounds for rejecting the assessee's trading results. The assessee carried on the business of manufacturing and sale of enamelled utensils and extruded aluminium doors and windows. The assessee's case before the Income-tax Authorities as well as the Appellate Tribunal was that it had maintained its boot, of account exactly in the same manner as they were maintained right from the inception of the assessee's business down to the relevant assessment year. The method of accounting adopted by the assessee in all these years was never found to be deficient so as to make it impossible for the tax authorities to deduce the correct profit therefrom. No defects in the purchases and expenses debited to manufacturing account or sales credited to the said account had been pin-pointed by the assessing authorities, nor had they been held to be not subject to verification. The explanation tendered by the assessee for its inability to maintaining separate trading accounts in respect of enamalled utensils and extruded aluminium products had not been discarded by the Income-tax authorities as being not satisfactory. Similarly the explanation of the assessee, to the effect that the sales were mostly made on the basis of orders which were received by it from private as well as Government organizations and that during the period under consideration the assessee-company did not get sufficient orders and hence the sales could not be pushed higher, had not at all been repelled by the assessing officer. The assessee's explanation was "that expenses like fuel, consumption, labour etc. were common expenses and could not be separated as the same labour generally has to work on both sides of the production". This explanation had neither been held to be unsustainable nor unacceptable by the Income-tax Officer or by the Tribunal. It clearly indicates that the Tribunal did not appreciate the assessee's…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492