The assessee, a registered firm of two partners, was doing business in the manufacture and sale of tea in Ceylon. In the assessment year 1955-56, the previous year of which ended on 31st March, 1955, the assessee made a return of income of Rs. 1,74,711. In arriving at its profits it valued the closing stock of tea in a very peculiar manner. It did not adopt either the cost price or the prevailing selling price on the last day of the account year. While the average cost per pound of tea was Rs. 1.27 and the selling price on the last day of the account year ranged between Rs. 1.30 and 1.75, the assessee adopted the value of 50 cents per pound. In addition, a certain stock of tea, which, according to the Income-tax Officer, had actually been sold, was not brought in for the computation of the profits, but treated as part of the closing stock. Taking the abovementioned quantity as actually sold and valuing the remaining quantity of stock of tea at Rs. 1.30 per pound, the Income-tax Officer arrived at a total of Rs. 74,763 as the figure that should have been properly displayed in the accounts. Since the value as shown by the assessee was only Rs. 26,853, he added the diff