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Issues:
1. Rejection of account books for assessment at headquarters. 2. Disallowance of depreciation deduction for machinery in Wakema mill. 3. Treatment of remittance as profits from foreign business. 4. Writing off debts before a specified date. Analysis: 1. The first issue pertains to the rejection of the assessee's account books for the assessment at headquarters. The Income-tax Officer rejected the books as they did not include details of foreign business, even though they were accurate for the headquarters business. The court held that the rejection was unjustified as the books were not false or incomplete, and the Income-tax Officer should have considered the entries in the books rather than making an estimate. The rejection based on Section 13 of the Act was deemed incorrect, as it pertains to accounting methods, not book rejection. Thus, there was no evidence to support the rejection of the account books, and the assessment should have been based on the entries in the books. 2. The second issue concerns the disallowance of a depreciation deduction for machinery in the Wakema mill. The deduction was disallowed because the mill was operated by a lessee, not the owner. The court found that the assessee failed to provide the necessary particulars for the deduction as required by law, rendering him ineligible for the deduction. Therefore, the disallowance of the depreciation deduction was deemed appropriate under the circumstances. 3. The third issue revolves around the treatment of a remittance as profits from a foreign business. The Income-tax Officer treated a specific sum as a remittance of profits, which the assessee received from Singapore. The court analyzed the history of the funds and found that the remittance indeed represented profits from the Colombo business, which were not taxable in India due to being earned four years prior to the assessment year. The court highlighted the clear evidence supporting the origin of the remittance and concluded that the Income-tax Officer erred in treating it as profits from a foreign business. Therefore, the remittance should not be considered taxable in India. 4. The final issue addresses the writing off of debts before a specified date. The debts in question were lent before 1930, with some secured and some unsecured. Despite partial repayments in 1930, the debts were not marked as irrecoverable until 1934. The court determined that there was no basis for asserting that the debts should have been written off before April 12, 1931. It was logical to wait until after that date to assess the recoverability of the debts, especially considering the partial repayments made in 1930. The Income-tax Officer lacked sufficient evidence to support the claim that the debts should have been written off earlier. In conclusion, the court ruled in favor of the assessee on three out of the four issues, entitling him to costs and providing a detailed analysis for each matter raised in the reference.
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