RAM CHANDRA SINGH RAMNIK LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The assessee in all these cases is a firm consisting of two persons who carried on contract work of earth excavation, boulder splitting, road making, etc.. for the Damodar Valley Corporation. In the accounting years corresponding to the assessment years 1951-52, 1952-53 and 1953-54 the assessee carried on work at a place called Telaya. In the last accounting year the assessee also carried on work at Panchait Dam. For the assessment year 1951-52 the Income-tax Officer wrote as follows:

(2.) At the instance of the assessee the High Court required the Income-tax Tribunal to make a statement of the cases on the following question of law:

(3.) On behalf of the assessee the learned counsel contended that the Income-tax authorities have wrongly applied the proviso to Section 13 of the Income-tax Act to these cases because there was no material upon which the account books of the assessee could be rejected and there is nothing to show that the method of accounting employed by the assessee was such that the correct income of the assessee could not be properly deduced. It was contended by the learned Counsel on behalf of the assessee that seven appeals were heard simultaneously with regard to the work done by the assesses at Konar and Telaya Dams and the Tribunal had lost sight of the distinction between the work done at Konar Dam and the work done at Telaya Dam, because materials were supplied to the assassee for execution of the work at Konar Dam but not for the Telaya Dam. This point does not appear to have been taken before the Income-tax Tribunal at the time of the hearing of the appeals. The argument was, however, advanced before the Tribunal at the time when the application was made to the Tribunal under Section 66(1) of the Income-tax Act for making a reference to the High Court. In rejecting this argument the Tribunal has observed that the orders of the Income-tax Officer and the Appellate Assistant Commissioner sufficiently indicate that materials were in fact supplied in the accounting years relevant to the assessment years 1951-52 and 1952-53. It was also observed by the Tribunal that the defect in the account of the assessee was that no register for the work in progress was maintained for the years 1952-53 and 1953-54, and this alone, in ,the opinion of the Tribunal was sufficient to reject the books of the assessee. The Tribunal which heard the appeals has also observed that the register for the work in progress may not have been necessary for the first two years in question, but the absence of the assessee's stock books of the materials for the years 1951-52 and 1952-53 and the absence of a register for the work in progress for the assessment year 1953-54 were sufficient reasons for rejecting the books of account of the assessee and for the application of the proviso to Section 13 of the Income-tax Act. In our opinion there is sufficient material in the present case which entitled the Income-tax authorities to reject the account books of the assessee for the relevant accounting years and to apply the proviso to Section 13 of the Income-tax Act.