GANESHDAS KALURAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66 (2), Income -tax Act, by the Income -tax Appellate Tribunal, Madras Bench, under the directions of this Court contained in its order dated 3 -12 -1948 in S.J.C. No. 10 of 1947.

(2.) THE applicant Ganeshdas Kaluram is a yarn dealer of Cuttack town and he was assessed to income -tax for the year 1943 -44 at the rate of 12 1/2 per cent gross profits by the Income -tax Officer though in the petitioner's accounts submitted to the Income -tax authorities he disclosed a profit of 7 1/2 per cent only. In rejecting the petitioner's accounts as regards his profits the Income -tax officer was mainly influenced by the following factors:

(3.) IN this case, however, we consider that any discussion about the relative merits of the majority view and the minority view in the aforesaid case is of mere academic interest. Even according to Munir J. if the proviso to Section 13 is inapplicable the Income -tax officer has ample powers under Section 23(3) to make assessment not only on the basis of the figures supplied by the assessee but on other materials that might have come to his knowledge. Munir J. has relied on 'Subbayya v. Commr. of Income -tax, Madras' AIR 1939 Mad 371, in support of his view. Thus even those authorities who doubt the legality of applying the proviso to Section 13 to cases of this type seem to have no doubt that in such circumstances Section 23(3) alone would empower the Income -tax officer to assess the petitioner. In the present case as already pointed out the Income -tax officer has not quoted the particular section of the Income -tax Act which he applied and it seems to be unnecessary for us to discuss elaborately whether the expression 'method of accounting' contained in the proviso to Section 13 should be given a narrow or liberal interpretation.