MULJI UDHAVJI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the I.T. Act, 1961, seeking a direction to the Income-tax Appellate Tribunal, Indore, for stating the case and referring it to this court for deciding the following questions :

(2.) ASSESSMENT year is 1974-75 for which the accounting year was year ending Diwali 1973. The assessee carries on the business of selling iron hoops and bardana strips. For the assessment year in question he showed sales of Rs. 10,41,203 with a gross profit of Rs. 1,15,000. The ITO while framing the assessment noted certain omissions in the account books including the valuation of the closing stock. In view of the facts mentioned by him he applied the proviso to Section 145(1) of the I.T. Act and made an addition of Rs. 1,05,967 in the gross profit shown by the assessee. The assessee went up in appeal before the Commissioner (Appeals). The Commissioner was of the view that the ITO, instead of investigating further into the trading results shown by the assessee, wrongly applied the proviso to Section 145(1) of the I.T. Act. He, therefore, deleted the addition.

(3.) LEARNED counsel for the assessee contended, firstly, that there was no concession as has been referred to in the Tribunal's order and, secondly, that the material on record did not warrant action under the proviso to Section 145(1) of the I.T. Act. On behalf of the assessee an affidavit of the I.T. consultant who appeared before the Appellate Tribunal was filed stating that he did not concede that the proviso to Section 145( 1) could be applied but had only conceded that day-to-day stock of the finished goods and consumption was not maintained by the assessee.