TMI Blog1945 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... g business, but the Income-tax Officer did not accept it and under Section 22 (4) of the Act issued a notice to the firm calling upon it to produce the books of account for the previous 3 years. The Income-tax Officer found that these books, particularly those which related to the cloth and money-lending business, were not only incomplete and incorrect but so maintained as to conceal the true income from money-lending and he after enquiry estimated the income for the year ₹ 15,624. Appeals to the Assistant Commissioner and Commissioner of Income-tax were dismissed. The firm thereafter made an application to this Court under Section 66 (3) of the Act and Pollock, J., directed the Commissioner of Income-tax to refer the following the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions, his income will be computed accordingly : (Sundarams The Income-tax Act, 5th edition, page 672). 3. The question as to what method of accounting was employed by the present assessee is a question of fact and it is clear from the orders, Exhibits A - C of the Income-tax Officer, Assistant Commissioner of Income-tax and the then Commissioner of Income-tax that the assessee had not followed a system of accounting from which its correct income for the year could be accurately determined. There was, indeed, as the Assistant Commissioner pointed out, no real system of accounting at all but a hybrid system in the sense that the assessee maintained 8 years continuous accounts for debtors in which the receipts from it were recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer is not going to make the assessment to the best of his judgment owing to want of materials but proceeds to make an enquiry as regards the truth or otherwise of the allegations made an enquiry as regards the truth or otherwise of the allegations made by the assessee in his return in order to determine whether the assessee has made out his allegation, there is nothing to prevent the Income-tax Officer from requiring the assessee to produce any evidence including accounts. It will be unreasonable to suppose that where, for example, an assessee claims certain deductions and the Income-tax Office wants to make an enquiry into the truth or otherwise of the allegations, it is open to the assessee to refuse to produce any accounts beyond the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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