VIJAYA TRADERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a firm Which trades in motor spares and the assessment years are 1961-62 and 1962-63. In respect of both these assessment years, the Income-tax Officer made a best judgment assessment having rejected the accounts produced by the assessee under section 13 of the Indian Income-tax Act, 1922, in one case and under the proviso to sub-section (1) of section 145 of the Income-tax Act, 1961, in the other. THE appeals preferred to the Assistant commissioner and the Income-tax Appellate Tribunal were dismissed. This reference is made by the Tribunal to us under section 66(2) of the old Act and section 256(2) of the new Act.

(2.) THE principal reason why the income-tax Officer reached the conclusion under the proviso to section 13 of the old Act and under the corresponding provision of the new Act that the system of accounting employed by the assessee did not assist a proper deduction of the income, profits and gains was that the assessee did not maintain a stock register. Having rejected the accounts on this ground, he proceeded to observe that since the gross profit returned by the assessee was low, he could make an assessment on the basis of comparable cases.

(3.) THIS explanation makes it clear that the Income-tax Officer's restricted criticism of the assessee's stock inventory was confined to the valuation of stock and did not extend to the correctness of the other particulars stated in it.