Law:

Section:

Section 145 of the Income-tax Act, 1961 - Method of accounting - Rejection of accounts - Assessment year 1996-97 - Assessee was carrying on business of purchase and sale of silver and gold ornaments - In course of assessment proceedings, Assessing Officer rejected books of account maintained by assessee on ground that there was no consistency in method adopted wherefrom true profits from his business could be worked out and, accordingly, made his own assessment resulting in certain addition - On appeal, Commissioner (Appeals) while upholding rejection of accounts by Assessing Officer held that gross profit adopted by Assessing Officer was on higher side and, accordingly, deleted portion of addition - Tribunal set aside order of Commissioner (Appeals) and directed Assessing Officer to accept sales declared by assessee and to apply GP rate of 20 per cent for gold and 32 per cent for silver ornaments - Whether Tribunal should have recorded a clear finding as to whether or not account books of assessee were correct and complete or whether or not from accounts maintained by assessee his income could not be properly deduced - Held, yes - Whether, therefore, issue was to be decided by Tribunal afresh on remand - Held, yes Section 4 of the Income-tax Act, 1961 - Charge of tax - Whether agricultural income of minor son of assessee has to be included in income of assessee for purpose of determining rate of income-tax applicable to income of assessee - Held, yes Words and phrases - 'income includes' as occurring in section 2(24) of the Income-tax Act, 1961 FACTS The assessee was carrying on the business of purchase and sale of silver and gold ornaments. The Assessing Officer rejected books of account of the assessee holding that there was no consistency in the method adopted by the assessee wherefrom the profits from his business could be worked out and made his own assessment resulting in certain addition in income of the assessee. In the said assessment, the Assessing Officer also took into consideration the agricultural income of the minor son of the assessee for the purpose of determining the rate of income-tax applicable to the income of the assessee. On appeal, the…

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