Khosla, J.

1. This is a reference made to this Court by the Income-tax Appellate Tribunal, Delhi, under Section 60 (1), Income-tax Act. The following question of law has been referred to this Court:

"Whether any addition may be made to the book version of business profits where no stock account is maintained, on the sole ground that the net profits disclosed appear to be insufficient in relation to the total turn-over?"

2. The assessee in this case is Messrs. Pandit Bros., Delhi, and the year of assessment is 1950-51. In order to understand the exact import of the issue involved it is necessary to set out briefly the facts which have given rise to this reference.

3. Messrs. Pandit Bros, had during the assessment year four branches:

(a) Chandni Chowk, Delhi,

(b) Connaught Place, New Delhi;

(c) Handicrafts, New Delhi; and

(d) The Mall, Simla.

Accounts of these four branches were maintained separately but since they were all owned by the same firm a consolidated statement of total profit and loss was prepared for the information of the Income-tax Officer. The Income-tax Officer on going through the accounts found that taxable profits should have been declared at a higher figur