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Question of whether the accounts tendered by the assessee were a true and complete record of his business transactions. Analysis: The judgment revolves around the assessment of the assessee, a money lender named Nathu Ram, under the Income Tax Act. The Commissioner of Income Tax referred the question to the High Court regarding the accuracy of the accounts presented by the assessee. The assessee's reported capital and income raised suspicions due to discrepancies in the figures provided. The Income Tax Officer found irregularities in the assessee's books, such as an increase in the capital account through unexplained small items and instances where interest on loans was not accounted for properly. The Income Tax Officer concluded that the books did not reflect the true income of the assessee, a decision upheld on appeal by higher authorities. The argument presented on behalf of the assessee was that since the books were arithmetically correct, the Income Tax authorities were obligated to accept them unless they could prove specific errors. However, the court disagreed with this stance, emphasizing that the assessing authority has the right to demand a satisfactory explanation for financial discrepancies, especially when cash amounts are involved. In cases where a money lender fails to properly document interest on loans or renews notes without accounting for interest, the assessing officer is justified in deeming the accounts unsatisfactory. The court highlighted the judicial nature of the assessing process and the importance of acting on evidence, ultimately affirming the Income Tax Officer's decision based on the ample material available to support the finding that the accounts were not a true and complete record. In conclusion, the High Court answered the question posed by the Commissioner of Income Tax in the affirmative, indicating that there were grounds to doubt the accuracy and completeness of the assessee's accounts. The judgment did not award costs, noting that the assessment was based on an optimistic estimate of the assessee's income, reflecting the court's acknowledgment of the discrepancies in the financial records presented.
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