COMMISSIONER OF INCOME TAX Vs. S AYYADURAI

JUDGEMENT

(1.) AS the questions referred to us are common, both these tax cases are taken up together and disposed of by this common order.

(2.) THE assessment years are 1974-75 and 1977-78, respectively.

(3.) THE Commissioner (Appeals) having accepted the assessee's appeal, the Income-tax Officer had chosen to file an appeal against the order of the Commissioner to the Tribunal. THE Tribunal held that the system of accounting followed by the assessee should be accepted or in the alternative the gross calculation made by the assessee should be taken into account and, therefore, the value of the gift articles relatable to those subscribers should be deducted for arriving at the total income. THE Tribunal does not seem to have noticed the fact that in the order of assessment the value of the opening stock, i.e., the amount invested for the purchase of gift articles, in the entire year had been deducted and that it was only the value of the closing stock that had not been deducted. THE Tribunal was in agreement with the Income-tax Officer that when deduction is allowed for the gift articles, the amounts received by the assessee in respect of broken cycles also should be treated as the income of the assessee and those amounts were not liable to be excluded.