1981 (3) TMI 122

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..... turnover of Rs. 5,23,650 in an earlier year. It was contended on behalf of the assessee that there was downward trend in the market for polythene bags manufactured by the assessee. But according to the ITO apart from the above reasoning, the assessee has not given any other reason, and that the assessee was not maintaining either the manufacturing account or else day-to-day stock account. In appeal, the AAC confirmed the estimate with the reasoning that the assessment order was a speaking one and the ITO has clearly brought out the loopholes in the accounts which contributed a lot against computing the correct income by the ITO. He further observed that the books of accounts and the vouchers were called for but he was unable to understand .....

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..... (SC) On the part, the ld. Deptl. Rep. has supported the impugned orders of the lower authorities and he contended that the assessee having not maintained any manufacturing account as also day-to-day stock account, the estimate of income in the case of the assessee was warranted and it has justifiability. On the facts, been sustained by the first Appellant authority. 3. We have heard the ld. authorised representatives of the parties at length. We have also perused very carefully the orders of the lower authorities and also the paper books placed on out file by the assessee. We have also perused the order of the Gauhati Bench of the Tribunal to which one of us (Judicial Member) was a party. We have also derived, with utmost respect, the de .....

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..... onance with the law laid down by the Supreme Court. In the case of Dhakeswari Cotton Mills Ltd. their Lordships of the Supreme Court have held that though the ITO is not fettered by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a court of law, yet the ITO is not entitled to make pure guess and make an assessment without reference to any evidence or any material at all. Yet again their Lordships of the Mysore High Court in the case of Vijaya Traders vs. CIT (1969) 74 ITR 279 (Mys) have held that where the accuracy of the accounts had not been doubted as also it has not been held that the manner in which the assessee maintained his accounts did not enable a proper de .....

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