TMI Blog1978 (2) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3,26,200 and of Rs. 83,523 were deductible from determination of profits for the assessment years 1962-63 and 1963-64 respectively ? " The applicant-assessees carry on business of manufacturing of fans, etc., on a large scale. The relevant account books for the accounting years 1961-62 and 1962-63 was destroyed in fire in November, 1962. In the returns filed by the assessees along with the statements of profit and loss accounts and balance-sheets a deduction of Rs. 3,36,200 from the determination of profits for the assessment year 1962-63 and a deduction of Rs. 83,523 from the determination of the profits for the assessment year 1963-64 were claimed by the assessees. The deductions were disallowed by the Income-tax Officer, but we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umentary evidence as may be admissible under the Indian Evidence Act, the use of the word "material" shows that the Income-tax Officer not being a court can rely upon material which may not be strictly evidence admissible under the Indian Evidence Act for the purpose of making an order of assessment. Courts often take judicial notice of certain facts which need not be proved, while administrative and quasi-judicial authorities can take "official notice" of wider varieties of facts which need not be proved before them. Thus, not only in respect of the relevancy but also in respect of proof the material which can be taken into consideration by the Income-tax Officer and other authorities under the Act is far wider than the evidence which is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns. Under section 209 of the Companies Act, the assessee-company was required to maintain proper books of account with reference to the receipts and expenditure taking place in the business of the assessees. The account books maintained by them must be such as to give a true and fair view of the state of affairs of the companies. The question arises, therefore, whether the reports of the auditors could be said to be "material" on which reliance could be placed by the income-tax authorities. Unlike the proof required of such reports as also of the account books under the Indian Evidence Act, it is quite competent for the income-tax authorities not only to accept the auditors'. report, but also to draw the proper inference from the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, when the business, as of the assessees, is of giant proportions and the branches are farflung. The Tribunal has also very properly relied upon the auditors' reports to draw the proper inference from the same. Since the evidence in income-tax proceedings need not consist necessarily of evidence admissible under the Evidence Act but may consist of other material which has a probative value, the Tribunal was justified in taking such material into account. It cannot, therefore, be said that the decision of the Tribunal was not based on any evidence. On the contrary, it was based on evidence meaning thereby that it was based on relevant material which can be considered in the income-tax proceedings. The applications are, therefore, dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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