Law: Income Tax Act, 1961

Section: 145,24

(a) Income-tax----Reference---Accounting---Finding that books of account had beer: maintained regularly and that no defects had been found in accounts--­Tribunal justified in holding that accounts could not be rejected under S.145---No question of law arose---Indian Income Tax Act, 1961, Ss. 145 & 256(2). Held, dismissing the application for directing reference, (i) that in view of the finding reached by the Tribunal that there were no discrepancies, or defects pointed out in the books of account and further that they were regularly maintained and also on the finding that there was no material brought on record to establish that purchases or expenses were inflated or sales suppressed and also in view of the finding that it was not the case that there was no method of regular accounting employed, the Tribunal was fully justified in coming to the conclusion that the provisions of section 145(2) the Income Tax Act, 1961, could not be invoked. This conclusion was bas: on a finding of fact and raised no question of law. (b) Income-tax--- ----Reference---Income from undisclosed sources---Finding that explanation regarding consumption of raw materials was satisfactory---Tribunal justified in deleting addition to income---No question of law arose---Indian Income Tax Act, 1961, S.256(2). The Tribunal, as regards the raw material used, took note of the fact that according to the assessee, the average weight changed from time to time looking to the quality and market requirements. The explanation so offered had not been controverted by the Revenue by bringing any material on record. The Tribunal observed that there was preponderance of probability that the average weight of various items manufactured saw change from time to time from heavier quality to lighter quality and looking to such trend the was every possibility that the average weights of various items furnished during the appellate proceedings were in vogue during the current assessment year and the average weight thereafter, changed to the higher side. The Tribunal was justified in deleting the addition of the sum on account of excess raw material shown as consumed. No question of law arose from the order of…

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