PENDURTHI VENKIAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are petitions under section 66(2) of the Indian Income-tax Act requesting this Court to direct the Income-tax Appellate Tribunal to state a case and refer the following questions of law alleged to arise out of their order :-

(2.) THE petitioner is running a rice mill in Srikakulam, Krishna District. He had a licence for procuring paddy, for milling it and for selling rice to the District Supply Officer and other persons designated by him. For the accounting period 22nd January, 1948, to 31st March, 1949, his accounts disclosed a turnover of Rs. 5,90,298. He showed a taxable income of Rs. 2,469. This was not accepted by the Income-tax Officer for the reasons mentioned in his order and he estimated the income at Rs. 65,000. On appeal, the Appellate Assistant Commissioner reduced the addition by Rs. 40,000, i.e., he estimated the income only at Rs. 25,000. Both the assessee and the department preferred appeals to the Income-tax Appellate Tribunal. THE Tribunal dismissed the appeal filed by the assessee and in the appeal filed by the department they estimated the net income at Rs. 40,000 instead of Rs. 25,000 accepted by the Appellate Assistant Commissioner.

(3.) IT will, therefore, be seen that the Income-tax Officer acted under section 23(3) of the Indian Income-tax Act. On appeal, the Appellate Assistant Commissioner, though he differed from many of the reasons given by the Income-tax Officer, did not accept the accounts as showing the entire transactions of the assessee for he concluded his order with the following remarks :-