TMI Blog1970 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ny portion of the cash credits amounting to Rs. 15,350 was correct, having regard to the independent estimate of income from the assessee's business ? " The material facts are: The petitioner, who, is carrying on wholesale and retail business in brass-ware and stainless-steel, for the assessment year 1962-63 declared his business income at Rs. 4,866. The accounts were not closed and the stocks at the commencement and closing of the relevant accounting year were not taken. The net profit of Rs. 4,866 was returned by the assessee on the basis of an estimate of gross profit on a turnover of Rs. 96,814 at 10% and after deducting overhead expenses therefrom amounting to Rs. 8,415. In the course of examination of the accounts, the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,359 as undisclosed income from other sources, in view of the petitioner's explanation that those credits represented sales effected by the petitioner, (2) when the income from business having been estimated, taking the above fact into consideration, on a turnover, which was much higher than the book turnover, there was no justification for the addition of the cash credits. After due consideration, the Income-tax Appellate Tribunal upheld the assessment of Rs. 15,350 as the petitioner's undisclosed income from other sources, but at the same time reduced the business income to Rs. 10,000. Aggrieved by the decision of the Tribunal, the assessee filed a reference application under section 256(1) of the Income-tax Act of 1961., requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax v.T. V. S. Bapana Rao (R.C. No. 27164), and also a decision in Kuppuswami Mudaliar v. Commissioner of Income-tax. In Kuppuswami Mudaliar's case the question was whether the additions made in the earlier year towards profits were available for being deposited in the year of account as cash credits in the various accounts. In that connection the learned judges of the Madras High Court observed that: " There can be no relaxation from that position and we have no doubt that the department cannot deviate from or wriggle out of it without departing from ordinary standards of justice and fairplay. If in such a case the assessee points to that addition as the source from which he got a particular amount which he is called upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 5 of its order is: " The assessee's claim in short is that the cash credits represent extra sales. There is no proof in this regard. Even the names of the parties to whom the sales have been made being not available, it is not known whether those represent sales at all. On the contrary the credits stand as extra amounts received in the books. Admittedly, the books are not closed and a stock inventory is not available. In this state of affairs, it is not possible to accept the assessee's contention that the credits can be regarded as sales on the basis of the fact that the purchases were Rs. 1,27,586 as against which sales of Rs. 96,814 have been only shown. It is even possible that the cash credits represent income of an earlier y ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
