MAHASUKHRAM MADANLAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this cage assessment was made upon the assessee Mahasukhram Madanlal under Section 23(4), INcome-tax Act, since the assessee failed to submit returns. The assessment year was 1943-44 and the corresponding accounting year was 1998-99 Samvat. Under Section 23(4) of the Act the INcome-tax Officer made an estimate of the income of the assessee to the best of his judgment. The turnover of the assessee was estimated to be Rs. 2,00,000 and the net income was assessed at Rs. 18,000. For the succeeding assessment year 1944-45 the assessee submitted his books and also filed returns but the books relating to the Samvat Year 1998-99 were not produced on the allegation that they were lost. For the assessment year 1944-45 the INcome-tax Officer made assessment on 27-2-194S under Section 23(3) of the Act.

(2.) IN the account books which were produced by the assessee the INcome-tax Officer found two set of accounts, one in the name of Ramnivas Mahasukhram and another in the name of Ganeshnarain Jodhraj. These two accounts showed a debit balance of Rs. 431 at the end of the Samvat year 1997-98. The INcome-tax Officer further noticed that these two accounts together showed a credit balance of Rs. 52,904 at the commencement of the Samvat Year 1999-2000. IN view of this increase in the two accounts the INcome-tax Officer started a proceeding under Section 34 of the Act against the assessee on 9-9-1946. After considering the explanation submitted by the assessee the INcome-tax Officer held that a sum of Rs. 52,000 should be added to the taxable income of the assessee for the assessment year 1943-44.