BEAUMONT, C.J. - In this case the Income Tax Commissioner raised a question which he was directed by this Court to raise under section 66(3) of the Indian Income Tax Act, the question being 'whether the Income Tax Officer was, under the circumstances of the case, free to adopt the basis and manner of computing the income of the assessee, which he did not adopt'. The assessee holds a license from the government to sell liquor at a shop in Ahmedabad and the question is how she ought to be assessed in respect of the income of that liquor shop. The basis on which the accounts are kept is to enter the amount of liquor purchase, which can be easily checked as all liquor is purchased from the Government depot, and then to calculate the amount sold, not by the cash received, but by charging the market price for the day for the amount by which the stock of liquor was diminished that day. There is no fixed market price, and it becomes a question of fact, not always easy to answer, what was the price on any particular day. That method would not indicate the true income if the liquor had been sold at short measure, and it is suggested that the practice is not uncommon. The Income-tax Officer refused to accept that method of accounting, and I am not prepared to say that the Income Tax Officer was not entitled to reject that basis.
Having rejected that basis, he, under Section 13 of the Act, adopted his own basis, and he showed in his assessment order the prices at which he charged the liquor. I think he ought to have shown the basis on which he arrived at those prices. On the prices charged by him, the Income Tax Officer adds, to the income shown by the assessee a sum of Rs. 24,701. Then he also adds a sum of Rs. 42,767 in respect of what is called kasar i.e. selling by short measure, and he says that it is a well-known fact that all liquor sellers in Ahmedabad do sell at short measure, and that the assessee must be taken to have adopted this practice. There is no evidence on record of any sale by short measure, and in my opinion the Income Tax Officer was not entitled to add Rs. 42,767 to assessees income by charging her with a criminal practice for which there was no evidence. There was an appeal to the Assistant Commissioner who upheld the order of the Income Tax Officer. The matter was then referred to the commissioner under Section 33, and he modified the assessment order. He added to the assessees income shown in her return 10 per cent. on the amount of the sale both for deficiency in the selling rate and kasar, and the figure he added came to Rs. 40,172 so that he reduced the figure of Rs. 67,488 (24,701 plus Rs. 42,767) added by the Income Tax Officer on account of the two items to Rs. 40,172. He has not shown whether he accepted the same ratio which the Income Tax Officer adopted as between the deficiency in the selling rates and the kasar. In my opinion all that we can do is to answer the question raised by the Commissioner in the affirmative, but with this qualification that the Income Tax officer was not entitled to add anything to the income of the assessee on account of kasar. With that answer the matter will have to go back the Commissioner to ascertain the figure. There will be no order as to costs.