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Issues Involved:
1. Rejection of the accounts of the assessee by the Appellate Tribunal. 2. Genuineness of the credit of Rs. 63,000 standing in the name of the sister. 3. Tribunal's findings regarding other credits in the names of the assessee, his brother, and the charcoal account. Detailed Analysis: 1. Rejection of the Accounts of the Assessee by the Appellate Tribunal: The Tribunal rejected the book results of the assessee due to several factors, including unexplained cash credits and inflated purchase prices. The assessee claimed a net loss of Rs. 65,280 from his contracts for the supply of milk, live animals, beef, and mutton to military authorities. However, the Income-tax Officer found discrepancies, particularly in the mutton supply contract, where the purchase prices of animals were inflated. The Tribunal agreed with the Department that the assessee had not suffered any loss over the contracts for the supply of mutton and estimated the gross profits in that line of business at 10% of the turnover. The unexplained cash credits and the inflation of purchase prices justified the rejection of the book results. The Tribunal's estimate of the profits from the contract for the supply of mutton at 10% of the gross turnover was deemed reasonable. 2. Genuineness of the Credit of Rs. 63,000 Standing in the Name of the Sister: The Tribunal found that the credit of Rs. 63,000 in the name of the assessee's sister, Sara Bibi, was not genuine. The assessee claimed that Sara Bibi had advanced the money as an accommodation loan. However, the Tribunal noted that the assessee and his sister were not well-to-do and that it was difficult to believe that they possessed such a large amount of money. The Tribunal also found inconsistencies in the evidence provided, such as a lawyer's notice demanding a share of profits and the subsequent satisfaction with a simple reply from the assessee. The Tribunal concluded that only Rs. 10,000 of the Rs. 63,000 could be considered genuine, and the remaining Rs. 53,000 was unexplained. 3. Tribunal's Findings Regarding Other Credits in the Names of the Assessee, His Brother, and the Charcoal Account: - Personal Account of the Assessee (Rs. 50,000): The assessee claimed that the credit represented the sale proceeds of jewels received from his mother and past savings. However, the Tribunal found no evidence to support this claim. The broker's bill provided by the assessee was not genuine, and there was no explanation for the balance of Rs. 9,000. The Tribunal concluded that the assessee was not in possession of Rs. 50,000 on March 7, 1944, to credit in his personal account. - Credits in the Brother's Account (Rs. 34,828): The assessee claimed that the credits in his brother Mohamed Ibrahim's account represented advances from savings and the sale of jewellery. However, the Tribunal found inconsistencies in Ibrahim's affidavit and sworn statement. There was no evidence of sizeable savings or the sale of jewellery. The Tribunal concluded that the assessee was unable to explain the nature and source of the Rs. 34,828 credited in Mohamed Ibrahim's account. - Charcoal Account Credits (Rs. 50,000): The credits in the charcoal account were alleged to be deposits from the brother's account and savings. The Tribunal found no evidence to support this claim and noted the hasty withdrawals and re-deposits. The Tribunal concluded that the credits in the charcoal account were not genuine. Conclusion: The Tribunal's findings were based on substantial evidence, and the rejection of the accounts of the assessee was justified. The credits in the names of the sister, brother, and the charcoal account were found to be fictitious. The Tribunal's estimate of the profits from the mutton supply contract at 10% of the turnover was reasonable, and the unexplained cash credits justified the rejection of the book results. The High Court affirmed the Tribunal's findings and answered the questions against the assessee.
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