COMMISSIONER OF INCOME TAX Vs. ATA HOSSAIN KHAN LTD.

JUDGEMENT

(1.) This appeal by special leave is against a judgment of a Division bench of the Dacca High Court on a reference order section 66(1) of the Income-Tax Act holding that the Income-Tax Appellate Tribunal was not justified, in the facts and circumstances of the case, in upholding the rejection of the accounts of the assessee and the enhancement of its profits as disclosed in the said accounts by taking recourse to the proviso to section 13 of the Income-Tax Act.

(2.) The assessee is a Private Limited Company which derives incomes from dealing in goods like paper board and glass and also from running photo offset and printing press including printing on containers, label printing, calendar printing on papers and also printing on tiny. The relevant assessment years were -1956-57, 1957-58 and 1958-59 and the rates of gross profits were shown at 34%, 33.6% and 35% respectively for the said years. The Income-Tax Officer on a consideration of the return filed by the assessee for the year 1956-57 made the following observation in respect of his finding that the account, submitted by the assessee, could not be accepted:

(3.) On a scrutiny of the loan account disclosed by the assessee in respect of the said asses-ment year, the Income-tax Officer found that a fresh loan of Rs. 30000/- was shown to have been taken from Mst. Sugra Begum, the mother of Ata Hossain Khan, the Managing Director of the Company. The Income-tax Officer was not satisfied as to the genuineness of this loan and held that the said sum of Rs. 30000/- was really the income of the assessee company kept outside (he books of account.