TMI Blog1951 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... kes an assessment under the first part of Section 13, read with Section 23(3) of the Act, following the accounts, closed on inventory basis, adding to the declared income unproved items of expenditure and in appeal before the Appellate Assistant Commissioner out of such unproved items those that are found vouched are eliminated, is it open to the Tribunal to hold that the accounts should have been rejected and assessment made under the proviso to Section 13, because a stock register has not been maintained by the assessee and profit disclosed by his trading account is low? (2) Whether under the circumstances of this case, when items of expenditure aggregating to ₹ 40,000 were added back by the Income-tax Officer (as unproved item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding the Tribunal held that the basis of computation adopted by the Income-tax authorities was faulty. Finding then that the account books did not reflect correct income, profits and gains, the Tribunal directed that the add back of ₹ 2,000 made by the Appellate Assistant Commissioner be increased to ₹ 30,000. In arguing the case counsel for the assessee urges two points for our consideration. Firstly, it is said that inasmuch as the assessment made by the Income-tax Officer was within the main provision of Section 13 read with Section 23(3) of the Act, the Tribunal was not competent in law to compute the income of the assessee under the proviso to Section 13 of the Act, and, secondly, that there was no material on the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Appellate Assistant Commissioner either under Section 28 or Section 31 of the Act. Clearly, the Tribunal's power of dealing with an order passed by an Appellate Assistant Commissioner is plenary and has been expressed in Section 33(4) of the Act as widely as can be conceived. From the language used in Section 33(4) of the Act it is plain that in an appeal under Section 33 of the Act the Tribunal is competent to decide facts as well as law and possesses authority to substitute its own order of assessment for the order under appeal. For an authority on this point Commissioner of Income-tax and Excess Profits Tax, Bihar Orissa v. S. Sen [1949] 17 I.T.R. 355 may be seen. But it is said that the Tribunal was not competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve no doubt that the argument raised under Rule 12 has no force. For the reasons given above, I do not accede to the argument raised that on the facts and circumstances of the case the Tribunal was not competent in law to compute the income of the assessee under the proviso to Section 13 of the Act. I now pass on to examine whether there is no material on the record justifying the add back of ₹ 30,000. In ordering the add back of ₹ 30,000 the Tribunal said:- In a business like the one which is carried on by the assessee it is very essential that there should be a proper stock account. No stock account is being maintained by the assessee. In the absence of stock account it is not possible to say whether the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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