1978 (3) TMI 133

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..... nced the gross profit from 20 per cent shown by the assessee to 25 per cent on the above enhanced turnover and made an addition of Rs. 7,500. Besides the ITO disallowed the interest paid to the minor son on the above cash credit as not genuine. In regard to the lodging business the ITO made an addition of Rs. 2,000 towards the possible suppression of receipts. 2. On appeal the AAC upheld the addition of Rs. 7,500. With reference to the disallowance of interest paid to minor Sripathy the AAC observed that the cash credit said to represent presents received on the occasion of the Upanaynam of the minor son could be accepted to the extent of 50 per cent of the credit. In this view he allowed a deduction of Rs. 62 in respect of the interest th .....

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..... ue the hotel business due to decline in trade and he actually closed it on 31st March, 1977. The learned Departmental Representative strenuously point out that similar additions have been made in the past and the assessee has acquiesced in them and therefore the addition for this yet should be sustained. We are unable to agree with him. The mere reason that in the earlier year the assessee did not file an appeal would not afford justification for confirming the addition for the year, for the simple reason that each year is a separate unit and the trading result in each year should be judged by the facts and circumstances relating to that year. The learned Departmental Representative then pointed out that the drawing of the assessee were poo .....

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..... nt by the AAC. The assessee has contended before us that there is no justification for disallowing the remaining 50 per cent of the interest. For the reasons mentioned above we are of the opinion that there is no justification for disallowing the 50 per cent of the interest due on the above cash credit. On an overall view of the matter and also considering the fact that the business itself was closed subsequently, as stated above, we hold that no adequate case is made out to justify the addition of Rs. 7,500. We direct that the income returned in respect of the hotel business be accepted. We also set aside the disallowance of the interest in respect of the above credit. 4. In the result the appeal is allowed.
Case laws, Decisions, Judg .....

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