1987 (7) TMI 21

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ction 256(2) of the Income-tax Act, 1961 (for short " the Act " hereinafter), as a result of a direction of this court to decide the following question of law, namely: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of section 145 can be resorted to only when the accounts of the assessee are rejected on the ground of defect in t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t the yield of dal and the overall increase in the aggregate weight of milled products was low as shown in the assessee's books of account. Accordingly, he asked the assessee to explain the same. The assessee gave several reasons to indicate that the moisture content was reduced resulting in reduction in the overall weight of the dal as well as the aggregate weight of all the milled products. The .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... figure of Rs. 45,708 to Rs. 21,770. The assessee preferred a further appeal to the Tribunal. It was contended by the assessee that the proviso to sub-section (1) of section 145 of the Act did not apply since the method of accounting adopted in the assessee's books of account had not been rejected nor had the books of account of the assessee been rejected by the Income-tax Officer. The Tribunal .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... er sub-section (2) of section 145 and not under the proviso to subsection (1) thereof. He argued that the Tribunal overlooked this aspect and, therefore, the conclusion reached by it is not justified. In other words, no attempt is made on behalf of the Revenue to rely on the proviso to sub-section (1)of section 145 of the Act, the only argument being based on the applicability of sub-section (2) o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ingly . Consequently the reference is answered with the above direction as follows : " The Tribunal was not justified in holding that the proviso to subsection (1) of section 145 of the Income-tax Act, 1961, was resorted to in the present case and it should have decided the matter on the basis of sub-section (2) of section 145 of the Act." No costs.
Case laws, Decisions, Judgements, Orde .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X