Law:

Section:

Section 145 of the Income-tax Act, 1961 [Corresponding to section 13 of the Indian Income-tax Act, 1922] - Method of accounting - Rejection of accounts - Assessment years 1947-48 and 1948-49 - In proceedings initiated under section 34 of Act of 1922, ITO rejected books of assessee's business of match manufacturing and made additions to its income on ground that accounts ware defective inasmuch as issue of chlorate could not be correlated to production of matches and that average consumption varied from month to month - On appeal, AAC reduced addition made by ITO - On further appeal, Tribunal held that assessee was not maintaining a daily mixture account in absence of which correlation of issue of chemicals with production could not be established - Tribunal, thus, purported to adopt such consumption as 17 pounds per 100 gross of matches directed recomputation of addition to that effect - Whether mere absence of maintenance of daily mixture account would not lead to conclusion that entire book results of manufacturing concern (assessee) became unreliable - Held, yes - Whether in view of fact that production of matches was not uniform and that match sticks and match heads in some box were not in uniform size, it was to be concluded that manual manufacture of said matches led to apparently excessive consumption of chlorate and therefore, adoption of 17 pounds per 100 gross of matches by Tribunal was not justified - Held, yes - Whether in such circumstances, it could not be said that accounts maintained by assessee were incapable of reflecting his true income, profits or gains from match manufacturing business and consequently, there was no scope of invoking proviso to section 13 of Act of 1922 - Held, yes FACTS The assessee was carrying on business of manufacturing matches. After having assessed the income of assessee in regular assessment, ITO initiated proceedings under section 34 of 1922 Act. The ITO was of the view that there was an escapement of the assessee's income from assessment, principally on the basis that the consumption of chlorate for the manufacture of matches was excessive. Accordingly, the ITO rejected books of account of the assessee and made…

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