1. The assessee is doing business in salt at Chinaganjam in Bapatla Taluk. In response to a notice under Section 22(2) of the Income-tax Act, 1922, he filed a return disclosing an income of Rs. 17,347 from business for the assessment year 1948-49. During the course of the assessment, he filed a petition dated November 19, 1951, making a disclosure of secret profit amounting to Rs. 25,000. Thus, the income admitted from business, including the amount subsequently disclosed, came to Rs. 42,347. The Income-tax Officer, however, did not accept the disclosure as correct and complete. He examined the accounts in detail, and made various additions under specific heads. He observed In his order 'detailed scrutiny of the accounts produced and the copies of the assessee's accounts obtained from the books of his customers residing in, the Hyderabad State when cross-checked revealed that the assessee had understated sales, inflated expenses and thereby concealed a large part of his income in the return.' For the various reasons given in his order, he held that, the day-book did not reflect the correct position and was hence unreliable. He added a sum of Rs. 3,226 under the head 'Manufacturing cost claimed In excess', Rs. 7,714 under the head 'Recoveries under cartage not accounted for', Rs. 3,273 under the head 'Recoveries under coolies' not accounted for, and sums of Rs. 1,094, Rs. 1,274 and Rs. 254 under the heads 'School fund', 'Carting cooly' and 'Mats', respectively. Dealing with the concealed profits, he added a sum of Rs. 37,200 under the head 'Understatement of sales', Rs. 1,747 under the head 'Bank account' and Rs. 4,875 under the head 'Shortage on rebagging'. These and other additions together disclosed an income amounting to Rs. 78,687 which he determined as income from business. The assessee preferred an appeal to the Appellate Assistant Commissioner, Income-tax, 'C' Range, Madras. The Appellate Assistant Commissioner of Income-tax also considered in detail the various additions. He reduced the addition under the head 'Excess manufacturing costs' byRs. 806. He deleted the sum of Rs. 1,094 under the head 'Recoveries for school fund' and the sum of Rs. 4,875 under the head 'Shortage on re-bagging'. In all other respects, he affirmed the additions made by the Income-tax Officer. In the result, he reduced the total income by Rs. 6,675. (Rs. 806 plus Rs, 1,094 plus Rs. 4,875) or in other words, sustained the addition to the extent of Rs. 29,565, in addition to the sum of Rs. 25,000 already disclosed by the assessee. A further appeal was preferred by the assessee to the Income-tax Appellate Tribunal, Hyderabad Bench.
2. The Tribunal held that the officer had given sound reasons for the additions made by him. They, however, stated that having regard to the turnover and the business conditions that obtained during the year of account, a further addition of Rs. 20,000 instead of Rs. 29,565, as sustained by the officer, would be adequate in the circumstances of the case. In coming to this conclusion, they also stated that they had come across certain cases where the profit disclosed by the assessee came to 40 to 50 per cent. with net income of about 25 per cent.
3. In compliance with the requisition of the High Court under Section 66(2) of the Act, the Tribunal has stated the case as follows:
'Whether, on the facts and in the circumstances of the case, the addition of Rs. 20,000 could be sustained ?'
4. It is argued by Mr. Ramarao, the learned counsel or the assessee, that the addition of Rs. 20,000 by the Tribunal is not the result of the consideration of any evidence, but that the figure was arbitrarily arrived at. He complained that the Tribunal has merely stated that having regard to the turnover and the business conditions that obtained during the year of account, it seemed to them that a further addition of Rs. 20,000 would be adequate in the circumstances of the case and the order does not disclose as to how that figure was arrived at. It is also his complaint that the Tribunal took into account cases where other assessees had disclosed profit of '10 per cent. to 50 per cent. with net income of 25 per cent. without making that material available to the assessee and giving him an opportunity to distinguish his case from cases relied on by the Tribunal.
5. We do not think that Mr. Ramarao is justified in contending that the Tribunal has arrived at the figure of Rs. 20,000 without any consideration of the evidence and has fixed it arbitrarily. The Tribunal has expressly stated that the officer has given sound reasons for the additions made by him. The reference can only be to the Income-tax Officer in so far as the additions made by him and were affirmed by the Appellate Assistant Commissioner. The reference, the Tribunal felt it unnecessary to restate those reasons once again in the order. Though, in our opinion, it would have been more desirable on the part of the Tribunal to give in its own words, briefly it may be, the reasons for their decision, it cannot be said that the Tribunal acted arbitrarily and fixed the figure of Rs. 20,000. We have gone through the order of the Income-tax Officer and the Appellate Assistant Commissioner. The Income-tax Officer has given detailed reasons for making the additions under each head and in respect of those additions which were upheld by the Appellate Assistant Commissioner, the Appellate Assistant Commissioner also gave his reasons. The Tribunal, as has already been stated, has observed that these reasons were sound. It cannot, therefore, be said that the Tribunal had acted arbitrarily, or that the decision of the Tribunal is vitiated on the ground that it is based on no evidence.
6. Mr. Ramarao relied upon a decision in Esthuri Aswathiah v. Commissioner of Income-tax,  66 I.T.R. 478 (S.C.). That decision, in our opinion, has no application to the facts of the present case. In that case, the Tribunal felt that the assessee was not able to explain the source of a particular item of income satisfactorily and it was not unlikely that he had some cash in hand from profits and assets received on partition of the joint family of which the assessee was a member, and estimated the income from undisclosed sources relying upon the offer made by the counsel for the assessee that he may be assessed on the amount of Rs. 50,000. The Supreme Court, in those circumstances, agreeing with the High Court, held that the judgment of the Tribunal was without recording any reasons and was, on that account, speculative. It observed that it would be the duty of the Tribunal conformably with the judgment of the High Court, to dispose of the case after hearing the assessee and the Commissioner in the light of the evidence and according to law. In the present case, however, the additions were made under different heads by the Income-tax Officer and the Appellate Assistant Commissioner who gave detailed reasons for such additions and the Tribunal held that those reasons were sound. In these circumstances we cannot say that the addition by the Tribunal was not based on any reasoning and was speculative.
7. Mr. Ramarao then submitted that if it had agreed with the Income-tax Officer, the Tribunal would have sustained the addition of Rs. 35,340 made by the officer ; if it had agreed with the Appellate Assistant Commissioner, it would have sustained the addition to the extent of Rs. 29,565 as done by him, but on the other hand it directed an addition of only Rs. 20,000. He therefore contended that the circumstance would show that the Tribunal did not agree either with the Income-tax Officer or the Appellate Assistant Commissioner and the figure was arrived at by the Tribunal independently and, as that figure was arrived at arbitrarily without giving any reason for arriving at that figure, the addition cannot be sustained. This argument overlooks the earlier part of the judgment of the Tribunal, where it has affirmed the reasoning for the additions given by the officer. It is true that the proper course for the Tribunal should have been to confirm the figure arrived at by the Appellate Assistant Commissioner, if it agreed with the finding of the Appellate Assistant Commissioner, but that is not a matter about which the assessee can complain. The mere fact that the Tribunal chose to reduce the addition to a sum of Rs. 20,000 cannot in any way detract from the position that the Tribunal had agreed with the reasoning of the Income-tax Officer, which was affirmed by the Appellate Assistant Commissioner.
8. Mr. Ramarao urged that this is a fit case for remand to the Tribunal, alter answering the question in favour of the assessee, for consideration of the appeal in the light of the answer given by this court. He drew our attention to the following observation, in Esthuri Aswathiah v. Commissioner of Income-tax:
'Section 66(5) of the Indian Income-tax Act, 1922, requires the Tribunal on receiving a copy of the judgment of the High Court to pass such orders as are necessary to dispose of the case conformably to such judgment. This clearly imposes an obligation upon the Tribunal to dispose of the appeal in the light of and conformably with the judgment of the High Court. Before the Tribunal passes an order disposing of the appeal, there would normally be a hearing. The scope of the hearing must of course depend upon the nature of the order passed by the High Court. If the High Court has agreed with the view of the Tribunal, the appeal may be disposed of by a formal order; if the High Court disagrees with the Tribunal on a question of law, the Tribunal must modify its order in the light of the order of the High Court; if the High Court has held that the judgment of the Tribunal is vitiated because if it is based on no evidence or that it proceeds upon conjectures, speculation or suspicion, or has been delivered after a trial contrary to rules of natural justice, the Tribunal would be under a duty to dispose of the case conformably with the opinion of the High Court and on the merits of the dispute.'
9. This was reiterated in Commissioner of Income-lax v. Jubilee Mills Ltd., : 68ITR630(SC) . He also relied on the decision in Omar Salay Mohamed Sait v. Commissioner of Income-tax, : 37ITR151(SC) . The Supreme Court, after pointing out that every fact for and against the assessee must be considered with due care by the Tribunal and that its conclusion should not be coloured by any irrelevant considerations or matters of prejudice, and on no account whatever should the Tribunal pass its orders on conjectures, speculation or suspicion, nor should it act on no evidence at all or on improper rejection of material and relevant evidence, and after holding that the order of the Tribunal could not, for the above reasons, be sustained, set aside the order and remanded the matter back to the Tribunal to reconsider the same in accordance with law. It may be noticed, however, that Omar Salay v. Commissioner of Income-tax was a case where the matter came up to the Supreme Court by way of an appeal by special leave from the order of the Income-tax Appellate Tribunal and the Supreme Court which heard the appeal considered it desirable to remand the matter for fresh consideration by the Tribunal in the light of the observations of the Supreme Court. The other two cases relied on were no doubt cases of reference under Section 66.
10. In this case, however, we are not inclined to adopt that course, even if such a course was permissible while hearing a reference under Section 66(2) of the Act, as we are of the view that the Tribunal has passed the order after agreeing with the detailed reasons given by the Tribunal and the Appellate Assistant Commissioner and the order cannot be said to be vitiated by any of the circumstances referred to it in the judgment of the Supreme Court.
11. Mr. Ramarao then contended that it is not permissible for this court to look into the reasons given by the Income-tax Officer or the Appellate Assistant Commissioner and should merely concern itself with the reasons given by the Tribunal and decide whether those reasons satisfy the requirement of law, and whether they are sufficient to enable the Tribunal to arrive at the conclusion at which it arrived. He submitted that this court cannot go outside the facts contained in the statement of case.
12. No exception can be taken to the contention that the High Court inexercising its jurisdiction under Section 66(2) of the Act cannot travel outside the statement of case prepared by the Tribunal. In this case, thestatement of case merely consists of reference to the orders of the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal. Theeffect of those orders is stated briefly and a copy of each order is annexedas annexures 'A', 'B' and 'C' and is expressly stated to form part ofthe case. There can be no doubt, therefore, that the facts contained in theorders of the Income-tax Officer, the Appellate Assistant Commissionerand the Tribunal must be deemed to have been incorporated in the statement of the case. We would, therefore, be not travelling outside thestatement of case, if we were to refer to the orders of the tribunals belowand proceed on the facts stated therein. In this connection, it is useful torefer to the decision of the Supreme Court in Commissioner of Income-tax v.Jadavji Narsidas & Co., : 48ITR41(SC) . In that case, the Supreme Court came to theconclusion that there was no fair disposal by the Tribunal of the questionwhether the firm did business in joint account, and the solitary ground forrejecting the claim is too indefinite to warrant this conclusion. But, nevertheless, it was contended that the Supreme Court should take into account also the reasons given by the Income-tax Officer which were before the Income-tax Tribunal. The High Court did so and the Supreme Court allowed those reasons to be brought before them. They observed that they would have preferred if the Tribunal in the order in the appeal by the assessee-firm had indicated even briefly their approval of those reasons and not left to be mentioned it the statement of the case. The Supreme Court then considered the reasons given by the Income-tax Officer and came to the conclusion that there was no foundation for the inference drawn by him. The Supreme Court observed that the High Court did not exceed its powers in examining the evidence in support of the inference of the Income-tax Officer.
13. In Praise and Co.(P.) Ltd. v. Commissioner of Income-tax,  60 I.T.R. 566 it was argued before the Calcutta High Court that the facts appearing in the orders of the Income-tax Officer and the Appellate Assistant Commissioner cannot be looked into as the said orders were not made part of the statement of the case. This argument was rejected and it was held that the said orders can be looked into. In the present case, as has already been noticed, the orders were expressly stated to from part of the case. The Calcutta High Court followed its earlier decision in Humayun Properties Ltd. v. Commissioner of Income-tax,  44 I.T.R. 74 where a reference was made to the rule of the High Court requiring that these orders and the records before the Income-tax Officer have to be printed in a paper book in a reference under Section 66 of the Income-tax Act and to the fact that the documents and proceedings annexed to the statement of case are annexed for consideration of the High Court and therefore the High Court is entitled to look into them even if there be no specific reference to them in the body of the statement.
14. We have, therefore, no hesitation in rejecting the contention of Mr. Ramarao that we are not entitled to look into the orders of the Income-tax Officer and the Appellate Assistant Commissioner, in order to see whether the Tribunal, which has observed that the reasons given by them are sound, was justified in its conclusion.
15. Mr. Ramarao has not been able to assail any of the reasons given bythe Income-tax Officer or the Appellate Assistant Commissioner on anysubstantial ground. He, however, argued that the addition of Rs. 37,000under the head 'Under-statement of sales' is arrived at on the basis thatthe profit per wagon was Rs. 200 as revealed by certain, inquiries. Hecontended that these enquiries were not placed before the assesses and hewas not given an opportunity to question the result of that enquiry.Neither the orders of the Tribunals below, nor the statement of the casediscloses that the assessee was not given any such opportunity or that heobjected to the lack of opportunity at any stage of the proceedings. Theonly argument that seems to have been advanced before the Appellate Assistant Commissioner was that, though many transactions were crosschecked, the discrepancies were only in a few cases. This contention was considered by the Appellate Assistant Commissioner and was repelled,
15. We do not, therefore, find any substance in the contention of the assessee that the Income-tax Officer ought not to have taken the profit in respect of each wagon at Rs. 200 for certain wagons and Rs. 100 for inferior variety of salt.
16. Another contention raised by Mr. Ramarao is that the Tribunal based its conclusion on (he circumstances that, in other cases, profits had been disclosed at 40 to 50 per cent. with net income of abut 25 per cent. and these instances were not put before the assessee and no opportunity was given to him to explain the difference between his case and other cases referred to. This contention has to be negatived, as it is not correct to state that the Tribunal's order is based upon this circumstance. The Tribunal agreed with the reasoning for the additions made under each head by the Income-tax Officer as affirmed by the Appellate Assistant Commissioner. That, by itself, would have been sufficient to enable the Tribunal to dismiss the appeal of the assessee, but it also considered the addition with reference to the profits made usually in similar cases and ultimately it came to the conclusion that the sum of Rs. 20,000 added, would bring the net income to about Rs. 62,000. There is some mistake in the last portion of the order where it is stated that the turnover is rupees two lakhs (turnover as shown per books, Rs. 1'60 lakhs plus suppressed income, Rs. 45,000). It is not proper to add surplus income of Rs. 45,000 to the turnover shown in the books to arrive at the correct turnover. What should have been added is the turnover which would have yielded surplus income of Rs. 45,000. In that case the turnover would be much more and the net income of Rs. 62,000 would represent a profit commensurate with the profits earned by other parties. But, as noticed earlier, this procedure adopted by the Tribunal was only in addition to the main ground on which the Tribunal based its decision, namely, that the reasons for making the additions by the Tribunal below were in its opinion sound. We do not, therefore, think that the assessee is justified in making a grievance of the fact that the Tribunal had not disclosed the particulars of other assessees referred to by them.
17. For all the reasons stated above, we answer the question referred to us in the affirmative.
18. The costs of the reference will be paid by the assessee to the respondents.
19. Advocate's fee, Rs. 250.