LexS. N. NAMASIVAYAM CHETTIAR versus THE COMMISSIONER OF INCOME-TAX, MADRAS
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) ... .. • S.C.R. SUPREME COURT REPORTS. 885 or the lawyer we are not directly concerned in the 1,60 present appeal. We have, however, referred to this decision because, in the course of discussion, the State of llombay learned judge has expressed his dissent from the view. The ;;~spital taken by the Bombay High Court in regard to Mazdoor Sabha hospitalE<, and we wish to make it clear that, in ou.r · ... - · opinion, the criticiEm made by the learned judgeGayendragadkar J . against the inclusion of hospitals within s. 2(j) is not well-founded. Dealing with a similar case of an attorney, the Bombay High Court ha.s taken the same view in National Union of Commercial Employees & Anr. And Meher (M.R.) & Ors. (Pereira Fazalbhoy & Co.)(1). We would accordingly hold that the High Court was right in holding t.hat the dispute between the appel- lant and the respondents was an industrial dispute to which s. 25F of the Act applied. The order passed by the High Court on the writ petition filed by the respon- dents is confirmed· and the appea.l is dismissed with costs. Appeal dismissed. S. N. NAMASIVAYAM CHETTIAR v. THE COMMISSIONER OF INCOME-TAX, . MADRAS (With connected appeals) (J. L. KAPUR AND M. HIDAYATULLAH, JJ.) .. Income Tax-Assessment-Rejection of accounts and estimate of profits-C amputation of profits supported by cases of other assessees- Stock register-Effect of non-production-In'dian Income-tax Act;. r922 (XI of r922) s. I] proviso. The appellant, a resident and ordinarily resident in India, carried on trade in Colombo in grains and foodstuffs for cattle. For the relevant assessment years the Income-tax Officer rejected the acr.ounts produred by the appellant on the grounds inter alia that there was absence of vouchers and that the stock account and the manufacturing account had not been kept or produced · and he then made an estimate of the profits. The Appellat~ Tribunal also agreed with the Income-tax Officer and held that the correci: profits could not be deduced from the books produced by the assessee and that therefore the proviso to s. 13 of the (r) \19~9} II L.L.J. 38. 1960 February, 3 886 SUPREME COURT REPORTS [1960(2)) Indian Income-tax Act, 1922 applied. I-faving taken into consi- -. deration all the relevant factors it computed the profits at 15 % S.N. Nam~sivayam on grains imported from India and 12!% on grains purchased in Chetttar· Ceylon, and, in support of its computation, it pointed out that in v. certain cases which had come to its notice the rates of profits The Commissioner went up to zo%. 0! Income-Tax, The appellant challenged the validity of the assessment on Madras. the ground that the principle of natural justice had been violated in that the Tribunal had taken into consideration the rate of profit in other cases without giving an opportunity to the appel- lant to explain those cases, and relied upon Dhakeshwari Cotton Mills Ltd. v. The Commissioner of Income-tax, West Bengal. [1955] r S.C.R. 94r. He also urged that the non-production of stock account was not such a defect as to entitle the Taxing Authorities to reject the books and apply the proviso to s. 13 of the Act. Held: (r) that the percentage of profits made by traders in other cases was not the basis made by the Tribunal for arriving at any conclusion as to the percentage at which income should be computed in the present case, but was merely an ancillary support to that conclusion and that Dhakeshwari Cotton Mills Ltd. v. The Commissioner of Income-tax, West Bengal, was not applicable to the case. (2) that the keeping of a stock register is of great importance because that is a means of verifying the assessee's accounts by having a quantitative tally; that if, after taking into account all the materials including the want of a stock register, it is found that from the method of accounting correct profits of the business are not deducible, the operation of the proviso to s. 13 of the Act would be attracted. Ghansyam Das Permanand v. Comniissioner of Income-tax C.P. & Berar (1952) 21 I.T.R. 79, Bombay Cycle Stores Company Ltd. v. Commissioner of Income-tax. (r958) 33 I.T.R. 13 and Commissioner of Income-tax v. McMillan and Co. [1958] S.C.R. 689, relied on. CIVIL APPELLATE JURISDICTION: Civil Appeals· No. 218 of 1955 and 219 to 223 of 1955. Appeal by special leave from the judgment and . Order dated September 14, 1951, of the Income-tax
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