estimate of advance tax showing income of 1,00,000/- but₹ this estimate income was held to be untrue and incorrect by the Income Tax Officer on the point of sales tax. The Income Tax Officer has observed that the assessee had debited to accounts the entire sales tax liability of ₹ 1,07,346/- to the trading account though an amount of 35,270-73 ps. was not₹ paid and it was shown as liability in the balance sheet. The Income Tax Officer added sales tax of 35,220/- and debited₹ to the trading account. Against the order of the Income Tax Officer, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals), Jabalpur which was registered as Appeal No.Rjn.B-17/84-85 and by order dated 15-9-1987, the appeal was partly allowed. Feeling aggrieved against the order of the Commissioner of Income Tax (Appeals), the Income Tax Officer filed appeal before the Income Tax Appellate Tribunal, Nagpur Bench, Nagpur and by order dated 29-6-1992, the appeal was dismissed. Against the order of the Income Tax Appellate Tribunal, Nagpur, the Commissioner of Income Tax, Jabalpur (M.P.) moved a reference under Section 256 (1) of the Income Tax Act, 1961 by making three questions of law before the High Court of Madhya Pradesh. The High Court of Madhya Pradesh registered the reference as M.C.C.No.201/1994 and by order dated 3-7-1996, answered the questions so referred in favour of the revenue.
