1998 (11) TMI 43

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..... s the assessee had only salary income his previous year could only be the financial year under section 3(1)(a) of the Income-tax Act, 1961, as section 3(1)(b) of the Act as it then stood had no application to the assessee. It may be mentioned that for the assessment year 1976-77, originally, the assessee had not been subjected to tax as he was not in employment for the period up to November 30, 1975. The appeal by the assessee before the Appellate Assistant Commissioner was unsuccessful. The Tribunal on further appeal held that the Income-tax Officer was in error in denying the benefit of section 3(1)(b) of the Act to the assessee. Before the Tribunal elaborate arguments had been advanced and the Bench which finally heard the appeal was u .....

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..... dictionary, keeping in view the purpose of the Act. In order to make up an account, it is not necessary that the accounts must be complex requiring the balancing of items of expenditure against the items of income, as the mere listing up of all the relevant data would also be a part of maintaining of an account. Where the figures are merely required to be listed and added up the period for which that exercise is undertaken will be the period for which the account can be said to be made up. In the case of a salaried employee, the figures which the assessee is required to have record of are merely the actual amount of salary paid to him by the employer. It is for him to choose the period for which he will maintain that record and that by .....

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..... of the next year would not amount to making up of accounts. The accounts referred to in section 3(1)(b) of the Act are the accounts with reference to which the taxable income of the assessee can be ascertained. The mere closing of ledgers and carrying forward the balances of the year to a later year without balancing the income and expenditure in the case of an assessee who carries on a business would not serve the purpose. In the case of a salaried employee, however, apart from making a record of the income by way of salary, no other entry is required to be made for the purpose of ascertaining the taxable income. Any deduction to which the assessee is entitled can be claimed in the return and it need not be a part of the account maintaine .....

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