TMI Blog1976 (3) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... in our opinion, necessary to produce more material in order to connect the amount of ₹ 10,000 with the income of the assessee-firm as a result of sales. In the absence of such material, the mere absence of explanation regarding the source of ₹ 10,000 would not justify the conclusion that the sum in dispute represents profits of the firm derived from undisclosed sales. We, therefore, accept the appeal, discharge the answer given by the High Court to question (1)(a) and answer that question in the negative, in favour of the assessee-appellant and against the revenue. - C.A. No. 759 of 1971 - - - Dated:- 1-3-1976 - Judge(s) : P. N. BHAGWATI., A. C. GUPTA., H. R. KHANNA JJ. Ram Panjwani, Deputy Advocate-General, Madhya P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover of the appellant for the period from November 1, 1950, to October 31, 1951, the assessing authority took into account a sum of Rs. 10,000 in respect of which there was a cash-credit entry in the account books of the appellant in the name of the wife of Kanji Deosi, partner of the appellant. The assessing authority treated the sum of Rs. 10,000 as income of the appellant out of concealed sales. Adopting ten per cent. as the rate of profit, the turnover in this regard was determined to be rupees one lakh. The above amount of rupees one lakh was added to the turnover in computing the gross turnover of the appellant. In doing so the assessing authority rejected the plea of the assessee that rupees ten thousand represented the amount gifte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm. There was also nothing to show, according to learned counsel, that that amount represented the income realised as a result of sale transactions entered into by the appellant-firm. The mere fact that there was no satisfactory explanation regarding the source of that money would not lead to the conclusion that that amount represented the income of the appellant-firm derived as a result of undisclosed sale transactions. The above contentions have been controverted by Mr. Ram Panjwani on behalf of the State. He has laid particular stress upon the absence of reasonable explanation on the part of the appellant-firm as well as its partner, Kanji Deosi, and his wife regarding the source of that amount. We have given the matter our earnest con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from undisclosed sources and assess him as such. As against that, for the purpose of levy of sales tax, it would be necessary not only to show that the source of money has not been explained but also to show the existence of some material to indicate that the acquisition of money by the assessee had resulted from transactions liable to sales tax and not from other sources. Further, where, as in a case like the present, a credit entry in respect of Rs. 10,000 stands in the name of the wife of the partner, no presumption arises that the said amount represents the income of the firm and not of the partner or his wife. The fact that neither the assessee-firm nor its partner or his wife adduced satisfactory material to show the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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