TMI Blog2005 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... in a similar fashion and its books of account have been accepted. In view of the foregoing discussions, the question referred to above, is answered in the affirmative, in favour of the Revenue and against the assessee - - - - - Dated:- 5-5-2005 - Judge(s): R. K. AGRAWAL., RAJESH KUMAR. JUDGMENT The judgment of the court was delivered by Rajesh Kumar J.-The Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court: "1. Whether the learned Income-tax Appellate Tribunal was legally correct in upholding the addition of Rs. 4,85,000 in the trading account and holding that resort to the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een paid wages of only a few hundred rupees per week others had been paid Rs. 2,000 or more for similar work. When confronted with this anomaly, the accountant explained that the higher wages were received by one person on behalf of several others as the Factories Act and labour laws forbid the assessee to employ labourers more than a certain number (about 8 or 10) without incurring additional liability, the wages claimed to have been paid by the assessee, cannot, therefore, be accepted as actually paid to the labourers and the assessee's books have additional reason for rejection. The assessing authority after rejecting the books of account, estimated the gross income after applying the gross profit at the rate of 19 per cent. In first app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer but the method employed is such that, in the opinion of the Assessing Officer, the income cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Assessing Officer may determine: Provided further that where no method of accounting is regularly employed by the assessee, any income by way of interest on securities shall be chargeable to tax as the income of the previous year in which such interest is due to the assessee: Provided also that nothing contained in this sub-section shall preclude an assessee from being charged to income-tax in respect of any interest on securities received by him in a previous year if such interest had not been charged to income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction register. The Division Bench held as follows: "In the absence of a register indicating the supply of yarn issued from the spinning department to the weaving department it is plain that there is no possibility of co-relating the supply of yarn and the production of cloth. Therefore, there was no way of checking whether the production of cloth shown in the books represents the true figure of production. The system of records adopted by the assessee is inadequate and does not afford an effective method of determining the true income, profits and gains so far as the production of cloth is concerned." In the case of Bharat Milk Products v. CIT reported in [1981] 128 ITR 682, the Division Bench of this court in the absence of day-to-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d justified. In the case of Awadhesh Pratap Singh Abdul Rehman and Brothers v. CIT reported in [1994] 210 ITR 406, the Division Bench of this court has upheld the rejection of books of account on the ground that neither the stock register was maintained nor sales were found verifiable in the absence of cash memos. In the case of Bastiram Narayandas Maheshri v. CIT reported in [1994] 210 ITR 438, the Division Bench of the Bombay High Court has upheld the rejection of books of account and the application of the proviso to section 145 in the absence of day-to-day manufacturing account of bidis including quantity of bidi manufactured daily, the figures of bidi leaves consumed per day in the factory. In the case of CST v. Girja Shanker Awa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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