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TMI Blog1968 (10) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... 922, while the assessment for the year 1962-63 is governed by the Income-tax Act, 1961. The question referred in Income-tax Reference Case No. 55 of 1967 is : " Whether the Tribunal was justified in applying the proviso to section 13 of the Indian Income-tax Act, 1922, to the facts of the case ? " The question in the other reference is practically the same, the only difference being that instead of the proviso to section 13 of the Indian Income-tax Act, 1922, it refers to the proviso to section 145 of the Income-tax Act, 1961. The assessee is a private limited company doing business in hill produce. For the assessment year 1961-62 it declared a loss of Rs. 9,354 in respect of its trade in arecanut, pepper, ginger and turmeric. The Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of the above provisions, the Appellate Tribunal stated as follows: " The main defect in the assessee's books is that the purchases are supported only by its own bought notes. No doubt, this is a common feature in this line of business as purchases are made mostly from agriculturists who do not have their own vouchers. But the fact remains that it is not possible to verify the particulars mentioned in the bought notes as in most cases the parties cannot be traced. The assessee's accounts are therefore such that the income, profits and gains cannot be properly deduced therefrom. This is sufficient for the application of the proviso to section 13." It is clear from the above finding that the only ground on which the Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamine its correctness. But if the finding cannot be sustained on any material, or if the facts stated in support of the finding have no relevancy to the conclusion of the Tribunal, it raises a question of law; and this court is entitled to examine whether the said finding can be sustained on these limited grounds. In this case, the assessee's accounts relating to arecanut business were rejected on the sole ground that the purchases are supported only by its own bought notes, which by itself does not constitute a valid ground for rejection of the accounts, for reasons which we have stated above. In the result, we answer the two questions referred to us in these cases in the negative and in favour of the assessee. There will be no order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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