1977 (9) TMI 43

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e had maintained a stock account of only the processed grey materials. There was no stock account for the purchases as such. The ITO felt that there was no knowing whether the assessee had sold grey materials without processing. He also noticed some increase in the expenditure under various heads such as interest, mukadami, dalali, salary, agent commission, godown rent, lodging charges etc. The consideration of decline in the income returned by the assessee as compared to the immediately preceding year was also taken note of. And for all the aforesaid reasons, the ITO was of the opinion that the trading results could not be accepted and a lump sum addition of Rs. 5,000 to the gross-profit disclosed by the assessee was called for. In appeal, .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... consideration of every thing placed before us we find no justification in this case for invoking the provisions of s. 145(1) or for making the addition as done in the case on estimate. This is stated to be the assessee's third year of business. The books of accounts of the assessee for the earlier two years have been fully accepted. It is in the same manner in which the assessee had maintained its accounts in the earlier two years that book are maintained in this year too. It is not as if the assessee has not maintained any stock book whatever. Admittedly, entries are made in the books not when grey materials are purchased but when they are received back after processing. No instance has been pointed out by the Department of any omission in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the assessee's own subjective decision that was really conclusive of the matter. He also observed that there was absolutely no evidence to show that the debtors were not financially capable of paying back the amount or had become insolvant or had closed down their business. The fact that the assessee had not taken any steps whatever for recovering the amount was also taken into account by the AAC. He thus held that the assessee had not proved that the debts had become bad in the accounting year. Having come to the conclusion, the AAC not only confirmed the decision of the ITO but also went further to disallow the entire claim of Rs. 7,461 which the assessee had made. The second ground in the appeal is directed against this decision of the A .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X