TMI Blog1993 (2) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... it was noticed by the Assessing Officer that a cash credit of Rs. 60,000 had been introduced on 25-7-1982 in the name of Shri Mangat Ram. Enquiries were made and ultimately the assessee surrendered this amount of cash credit. While scrutinising the manufacturing account of the assessee, it had also been noticed that the assessee had debited labour charges amounting to Rs. 46,412 as against similar charges of Rs. 4,299 and Rs. 2,333 for assessment years 1982-83 and 1981-82 respectively. These expenses were found to be unreasonably excessive and unverifiable because of the cuttings in dates on the vouchers produced. The Assessing Officer accordingly disallowed a sum of Rs. 35,000 on account of labour expenses being excessive or unreasonable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the manufacturing account of the assessee could not have come out of the aforesaid addition of Rs. 60,000 by way of cash credit. 5. The assessee through its counsel Shri J. L. Chaudhary has filed written submissions vide letter dated 21-2-1993. These have been duly considered by us. The learned Counsel for the assessee has strongly relied on the order of the first appellate authority. It has further been explained in the written submissions that up to 18-10-1982, only a sum of Rs. 22,706 had been utilised for labour expenses. It has also been pointed out that a sum of Rs. 35,000 was withdrawn from the cash credit account on 13-2-1983 which was available with the assessee for being spent on 18-2-1983 (Rs. 17841), 21-2-1983 (Rs. 6785) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also noticed several deposits. The assessee's explanation that the excess expenditure was made from the amounts deposited with him by some shopkeepers but not entered in his books, was not accepted. The alternative explanation that expenditure incurred earlier had possibly been recorded later was also rejected. In regard to the cash deposits of Rs. 28,200, the assessee's explanation was partly rejected. The Assessing Officer rejected the account books of the assessee and estimated the assessee's income on an overall figure of Rs. 5,00018. The total income of the assessee was reduced to Rs. 130000 by the Tribunal in addition to the book profits. Penalty proceedings under section 271(1)(c) were initiated and penalty was levied. In those pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier years. 9. We have extensively reproduced the facts of the three cases which have been relied on by the learned Counsel for the assessee in the written submissions. A careful perusal of these cases clearly shows that these cases are distinguishable. The principle laid down is that if an intangible addition has been made earlier and there are also cash credits, then to that extent separate addition on account of cash credits cannot be made and the two additions have to be telescoped. Similarly if the assessee had incurred an expenditure outside the books of account, that expenditure can also be said to have been met from such secret funds or intangible additions made in the assessee's case earlier. The facts of the instant case are al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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