Law:

Section:

Section 145 of the Income-tax Act, 1961 - Method of accounting - Rejection of accounts - Assessment year 1962-63 - Petitioner, assessees were engaged in production of ground nut oil - Deputy Commercial Tax officer rejected books of accounts of assessees and determined turnover of assessees on basis of electricity consumption and made best assessment upon them - For said assessment no test was made in assessee's mill to determine yield rate to electricity consumption rather said conclusion was arrived after conducting test in other undertakings - Whether basis furnished by tests conducted in other undertakings could not be of much relevance for purpose of assessees mills about which it could not be said that they were similarly circumstanced in all respects - Held, yes - Whether, therefore, best assessment was liable to be set aside - Held, yes FACTS The petitioners/assessees were engaged in production of ground nut oil. The provisional assessments were made upon the petitioners for the relevant assessment year and the assessment amounts were also paid. At the time of final assessment, the Deputy Commercial Tax Officer, on a perusal of the account books submitted before him, came to the conclusion that they were not in order and could not be safely acted upon. The account books being thus rejected, the only course left open to the taxing authority was to make assessment to the best of his . The Deputy Commercial Tax Officer assessed the turnover of petitioners on the basis of consumption of electricity. No test was conducted in that very mill to find out the rate of consumption of electricity for a definite quantity of seeds to be converted into oil. He rested his conclusion on the result of tests conducted in other mills. He determined the turnover on that basis and levied the tax thereon. On writ petition : HELD There was no strong or valid reason why the authority did not carry out the test in the rotaries of the petitioners themselves. The fact that the meter was inconveniently placed was no ground against carrying on the experiment. It was pointed out that in like cases the Tribunal itself had set aside the assessments in view of the wide disparity in…

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