HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
S. N. Namasivayam Chettiar v. Commissioner of Income-tax, Madras
Civil Appeals Nos. 218–223 of 1955
[1960] 2 SCR 885 ·
Indian Income-tax Act, 1922: section 13 proviso; section 66 · Excess Profits Tax Act
Sources & disclosures includedDownload original judgment / order
2-judge bench · J. L. Kapur · M. Hidayatullah
Assessment years: 1943-44, 1944-45, 1946-47
01 · Facts of the case
The resident assessee traded in grains and animal feed in Colombo. Tax authorities rejected accounts showing low profits because purchase vouchers, quantitative stock and manufacturing records were missing and several financial entries remained unexplained. The Tribunal accepted the returned turnover but estimated trading profit rates.
Source: Primary report: SCR 887–891
02 · Discussion by the Hon’ble Court
A regularly used accounting method does not preclude section 13 where correct profits cannot be deduced. Missing stock records were considered with multiple other defects, not as an automatic standalone ground. Other traders’ profit rates were ancillary corroboration, not the basis of the estimate, distinguishing Dhakeshwari.
Source: Primary report: SCR 890–895
03 · Judicial decision
The Tribunal’s rejection of accounts and estimation disclosed no error warranting Article 136 intervention. The related excess-profits-tax appeals followed the income-tax result.
Source: Primary report: SCR 895–896
04 · Outcome / in whose favour
All six assessee appeals were dismissed with one consolidated set of costs.
Source: Primary report: SCR 896
05 · AKHB REVIEW POINT
Record the specific defects preventing reliable computation and the actual basis of an estimate. Do not read the judgment as dispensing with disclosure of adverse material or as authorising rejection solely because a stock register is absent.
Source: Primary report: SCR 892–895
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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