HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal
Civil Appeal 217 of 1953
[1955] 1 SCR 941 ·
Income-tax Act 1922, section 23(3) · Article 136
Sources & disclosures includedDownload original judgment / order
5-judge bench · Mehr Chand Mahajan C.J. (author) · S. R. Das · Ghulam Hasan · Bhagwati · Venkatarama Ayyar
Assessment years: 1944–45; accounting year 1943–44
01 · Facts of the case
For AY 1944–45 (accounting year 1943–44), the company’s books were in a magistrate’s custody. It filed an incomplete return and sought time to supply particulars. The officer refused the requested extension and estimated gross profit at 40 per cent, against the disclosed 28 per cent, adding Rs. 36 lakhs for supposed unrecorded sales. The Tribunal adopted 35 per cent and reduced the addition to Rs. 16 lakhs, using undisclosed comparative mill profit rates while declining to consider further records.
02 · Discussion by the Hon’ble Court
The Revenue relied on factual finality and the taxing authorities’ freedom from technical evidence rules. The Court held that such freedom did not permit pure guess or bare suspicion. The Tribunal had to disclose the adverse departmental comparative material, allow an adequate opportunity to rebut it, and hear the relevant supporting records. Article 136 supplied exceptional, sparingly exercised intervention against unfair adjudication notwithstanding finality provisions; the Court declined to formulate an exhaustive rule for that power.
03 · Judicial decision
The appeal was allowed, the Tribunal order set aside and the case remanded for a fair fresh estimation. Both parties could produce material; the Tribunal could remit to the officer. Costs would abide the result.
04 · Outcome / in whose favour
Assessee obtained remand.
05 · AKHB REVIEW POINT
This is a procedural remand, not judicial acceptance of the returned profit or extinction of the assessment. Verify comparability, disclose adverse material and hear rebuttal before estimating profits.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 11-page report, SCR 941–951, concerning Civil Appeal 217/1953. Connected Civil Appeal 218/1953 is mentioned as unreported and is not a separate judgment reproduced here.
Statutory scope
Historical statutory text and assessment period only. Present statutory equivalence and later judicial treatment are not cleared.
Later treatment
Source checked 2026-10-19. Subsequent treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.