COMMERCIAL ART PRESS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following question under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE assessee is a registered firm and derives income from a printing press. Until the assessment year 1962-63 its income was being assessed by applying rates of profit to the sales disclosed and not on the basis of its account books. For the first time, in assessment proceedings for the assessment year 1962-63, the Income-tax Officer scrutinised the account books and discovered various omissions and mistakes in the totals and also found that the balance-sheet had been incorrectly prepared. THE net increase in the excess of assets over liabilities came to Rs. 57,082 during the previous year. THE assessee explained that part of its records for the relevant year had been washed away by floods' and that the accounts were reconstructed from the material available to it. It admitted that the trial balance could not be reconciled. THE Income-tax Officer added the amount of Rs. 57,082 to the total income disclosed by the assessee, and that addition was maintained by the Appellate Assistant Commissioner and thereafter by the Income-tax Appellate Tribunal.

(3.) DEDUCTING the opening debit balance amounting to Rs. 25,674 the balance of Rs. 32,543 represented the concealed income. In arriving at these figures the Inspecting Assistant Commissioner referred to the findings in the assessment case. Before the Inspecting Assistant Commissioner it was contended on behalf of the assessee that as the account books were defective it was possible that some of the undisclosed income related to earlier years. The plea was rejected for want of evidence.