FRANCIS AND COMPANY PRIVATE LIMITED Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KERALA
C.M. FRANCIS AND CO. (P.) LTD.
COMMISSIONER OF INCOME-TAX
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(1.) These two references have been made by the Madras Bench of the Income Tax Appellate Tribunal, as directed by this Court on the application of the assessee, who is the same in both these cases. ITR Case No. 55 relates to the assessment year 1961-62, while the other reference relates to the assessment year 1962-63. The assessment for the year 1961-62 is governed by the Indian Income Tax Act, 1922, while the assessment for the year 1962-63 is governed by the Income Tax Act, 1961. The question referred in ITR Case No.55 of 1967 is:-
"Whether the Tribunal was justified in applying the proviso to S.13 of the Indian Income Tax Act, 1922, to the facts of the case ."
The question in the other reference is practically the same, the only difference being that instead of the proviso to S.13 of the Indian Income Tax Act, 1922, it refers to the proviso to S.145 of the Income Tax Act, 1961.
(2.) The assessee is a private limited company doing business in hill produce. For the assessment year 1961-62 it declared a loss of Rs. 9,354/- in respect of its trade in arecanut, pepper, ginger and turmeric. The Income Tax Officer accepted the books of account of the assessee in respect of pepper, ginger, and turmeric except in respect of arecanut. The gross profit disclosed by the assessee's accounts in arecanut were Rs. 9,958/-. But the Income tax Officer estimated it at 4.5% of the turnover, and added Rs. 19,646/- in fixing the gross profit in arecanut. Thus, the assessee's total income was fixed at Rs. 10,385/-
(3.) For the assessment year 1962-63, the assessee declared an income of Rs. 2,676/-. The books of account of the assessee were accepted for this year also in respect of the assessee's business in pepper, ginger and turmeric; but they were rejected in respect of arecanut. As against a gross profit of Rs. 19,789/- disclosed by the assessee's books of account, the Income Tax Officer estimated it by adding at Rs. 36,568/-; and the assessee's total income was fixed at Rs.39,444/-.;
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