9911796707
TMI Blog1976 (11) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed on behalf of the assessee before the Income-tax Officer that due to the death of the husband of Smt. B, the books of accounts were not readily available and, therefore, the income disclosed may be accepted on humanitarian grounds. The ITOrejected this contention and in view of the default on the part of the assessee to comply with the notice under s. 142(1) of the Act, the proceeded to complete the assessment under provisions of s. 144 of the Income-tax Act. 2. The assessee moved an application under s. 146 which was rejected by the Income-tax Officer and it is stated before us that not further steps were taken by the assessee so far as the application of s. 146 was concerned. The assessee, however, filed an appeal before the AAC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siderations which govern a best judgment assessment made under s. 144 of the Act are set out in the decision of the Supreme Court in the case of State of Kerala vs. C. Velkutty(1). Their Lordships of the Supreme Court dealing with the provisions of s. 12 (2) (b) of the Travancore-Cochin General Sales Tax Act, 1125 M.E., which are analogous to the provisions of s. 144 of the Act have observed as follows. "The limits of the power are implicit in the expression "best of his judgement". Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a judge, but settled on invariable principles of justice. Though there is an element of guesswork in a best judgment assessment, it sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis even though the courts may think that it is not the most appropriate basis, the estimate made by the assessing authority cannot be disturbed." Keeping these well-settled principles in mind, we find that the Income-tax Officer had before him the balance sheet for the earlier year and in the absence of books of accounts he was fully justified in relying on the said balance sheet with a view to finding out whether the deposit in question was reflected in the accounts for the earlier year or not. It is clear from the balance sheet for the earlier previous year, viz. 30th June, 1969, that the account in the name of E did not appear in the balance sheet. Therefore, the AAC was clearly in error in coming to the conclusion that the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Income-tax Officer was justified in treating the said amounts as not genuine. Shri Metha on behalf of the assessee, however, relied on the order of the AAC. 7. Here again, keeping in mind the observations of the Supreme Court, cited supra, we find that the accounts, except in the name of H (item No.3) are found in the balance sheet for the year ending 30th June, 1969. We also find that there is a large variation between the closing balance in account No. 1& 2above, inasmuch as, the closing balance in the account of F was Rs. ——— as on 30th June, 1969 while the closing balance as on 30th June, 1970 was Rs. 13,909. Similarly in the account of G(item No. 2) while the closing balance was Rs. 1,500 only as on 30th June, 1969, the closing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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