INTERNATIONAL FOREST CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Chandigarh, has referred for our decision the following question of law arising from its,order dated December 11, 1970, passed in Income-tax Appeal No. 3078 of 1969-70 :

(2.) THE facts leading to this reference are :

(3.) APPEARING for the assessee, Mr. Chadha has strenuously urged that the income-tax authorities have misdirected themselves, that there is no material on the record for holding the 42,250 c. ft, of timber was not sold in favour of Abdul Rehman Guru at the rate and for the consideration shown by the assessee, that simply because 42, 250 c, ft. of timber was shown to have been sold for Rs. 25,246 could not reasonably lead to the conclusion that there had been a suppression of sales on the part of the assessee, that the material on the record is not legally sufficient to sustain the estimated addition of Rs. 2,27,354 made by the income-tax authorities in the trading account for his client, that the schedule adopted by the forest department of the State regarding the yield of sawn timber has no statutory or legal force, that the report of the Ayyangar Commission which was not a judicial body being irrelevant and inadmissible in evidence could not be relied upon and that the Appellate Tribunal has erred in allowing it to be freely cited before it by the departmental representative and itself relying on the same, that neither the sale shown to have been made to Abdul Rehman Guru of Doabagh nor the report dated May 11, 1962, of the Divisional Forest Officer, Langet, could be brushed aside by the income-tax authorities, that the lesser out-turn of sawn timber could not sustain the addition which implied a finding of suppressed sales which had got to be proved by those making the addition and the aforesaid estimated addition being arbitrary and based on conjectures and surmises was bad and illegal.