S N NAMASIVAYAM CHETTIAR S N NAMASIVAYAM CHETTIAR S N NAMASIVAYAM CHETTIAR Vs. COMMISSIONER OF INCOME TAX MADRAS:COMMISSIONER OF INCOME TAX MADRAS:COMMISSIONER OF EXCESS PROFITS TAX MADRAS

JUDGEMENT

(1.) In these six appeals the common question raised is whether the proviso to S. 13 of the Income-tax Act is applicable to the facts and circumstances of these cases. They are therefore disposed of by one judgment. Civil Appeal No. 218 of 1955 arises out of the assessment for the year 1943-1944. Civil Appeals Nos. 219 to 223 relate to the assessment years 1944-1945, 1946-47 and for the chargeable accounting periods from January 1943 to February 1944, and from February 1945 to February 1946. The appellant in each of the appeals is the assessee and the respondent is the Commissioner of Income-tax and Excess Profits Tax, Madras.

(2.) The appellant is a 'resident and ordinarily resident' in India and carried on extensive trade in Colombo in grains, fodder, gram and other food-stuffs for cattle and poultry. For the assessment year 1943-1944 the appellant showed a turnover of Rs. 17,74,825 and a gross profit of Rs. 63,217 which is about 3.5 per cent. For the two previous assessment years the appellant's gross profits were 9 per cent and 8 per cent respectively. The Income-tax Officer, by his order dated March 20, 1948, rejected the accounts and estimated the gross profit by adding back Rs. 2,38,831 to the returned income. Thus he raised the turnover to Rs. 20,00,000 and the gross income to Rs. 3,00,000 giving a profit of 15 per cent, on the estimated turnover. On appeal to the Appellate Assistant Commissioner, the order of the Income-tax Officer was confirmed. The Income-tax Appellate Tribunal on appeal by its order dated September 14, 1951, after pointing out various defects, rejected the account books but accepted the appellant's turnover and computed the profits at 15 per cent. on grains imported from India and 12 1/2 per cent. on grains purchased in Ceylon. It held that correct profit for the year under assessment could not be deduced from the books produced by the appellant. The Excess Profits tax for the chargeable accounting period from February 10, 1942 to January 16, 1943, was decided on the basis of the Income-tax assessment for the year 1943-44. On November 21, 1951, the appellant applied to the Tribunal for stating a case under S. 66 (1) on the following four questions:

(3.) In the other appeals also the course of proceedings before the Income-tax Officer, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal was the same. For the assessment years 1944-1945 and 1946-1947 the appellant disclosed a turnover of Rs. 10,35,748 and Rs. 5,98,728 respectively and the gross profits rates were 10.7 per cent. and 8.7 per cent. respectively. As the books of accounts in regard to these years also were rejected, the Income-tax Appellate Tribunal applied S. 13 and estimated the gross profit rates at 12 1/2 per cent, and 10 per cent for the respective years. The appellant applied to the Tribunal under S. 66 (1) of the Act for stating a case to the High Court for its decision on the following two points: