R.S.Narula, J.

1. The question, "whether, on the facts and in the circumstances of the case, provisions of Section-23A were applicable to the case?" has been referred to us under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter called "the Act"), at the instance of the Commissioner of Income-tax, Punjab, Jammu & Kashmir, and Himachal Pradesh, Patiala, in the following circumstances:

Messrs. Avon Cycles Private Ltd., Ludhiana (hereinafter referred to as "the assessee"), submitted returns of income for the assessment years 1956-57 and 1957-58, on the basis of accounts which were found to be defective, inasmuch as no day-to-day record had been kept by the assessee for the consumption of raxv materials and stores. In his order, dated February 9, 1959, relating to the 1956-57 assessment year, the Income-tax Officer did not, therefore, accept the figures of profit furnished by the assessee and after invoking the proviso to Section 13, computed the profits of the assessee at certain flat rates with, the agreement of the assessee, and worked out the gross profits on that basis. The result was that the gross profit computed by the Income-tax Officer was Rs. 36,603 more