1966 (9) TMI 25

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..... ate Assistant Commissioner had rejected the books maintained by the assessee. They have given some reasons for not relying on the account books maintained by the assessee. In his appeal before the Income-tax Appellate Tribunal, the assessee challenged the finding given by the Income-tax Officer as also the Appellate Assistant Commissioner to the effect that there are grounds for rejecting the accounts maintained by the assessee. The Tribunal being a final fact-finding body was required to consider whether the Income-tax Officer and the Appellate Assistant Commissioner were right in rejecting the book results and in proceeding to assess the assessee on the basis of the proviso to section 13 of the Indian Income-tax Act. Though this question .....

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..... ncome, profits and gains of the assessee can properly be deduced therefrom. The decision as to the method of accounting is to be arrived at first by the Income-tax Officer after a careful scrutiny of the accounts whether they be simple or complicated, and the power is to be reasonably and judicially exercised, which excludes any subjective or arbitrary decision by the Income-tax Officer ; but the power so exercised is not clothed with finality and is not excluded from review by the Appellate Assistant Commissioner and in reviewing the order the appellate authority can exercise the same powers which the Income-tax Officer could exercise." In the instant case, both the Income-tax Officer as well as the Appellate Assistant Commissioner, after .....

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..... n. On the whole we are of the opinion that the order of the Tribunal is a highly cursory one. It has not considered the relevant material in the case. Its conclusion that the addition should have been Rs. 1,88,904 does not appear to be supported by any material on record. We are of the opinion that it is necessary in the interest of justice that the Tribunal should re-examine the question arising for decision in this case afresh. For the reasons mentioned above, our answer to the question referred to us is that the Tribunal's order does not contain any material on the basis of which the Tribunal could have applied the proviso to section 13 of the Indian Income-tax Act, 1922, to the facts of this case. We are further of the opinion that on .....

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