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Issues involved: Appeal against order of Income-tax Appellate Tribunal for assessment year 1991-92 regarding sundry credits and addition based on sales tax assessment.
Sundry Credits Issue: The assessee, a dealer in old spare parts and scraps, showed sundry credits in the accounts for the relevant year. The Assessing Officer made an addition as the assessee failed to provide names and addresses of creditors or confirmation letters. The appellate authority deleted the addition citing the accountant's lack of qualification and improper accounts. The Tribunal upheld the appellate authority's decision, but the High Court disagreed. The Court held that the burden of proof lies on the assessee to establish sundry credits, and failure to do so can lead to addition as income. Referring to sections 68 and 69(c) of the Income-tax Act, the Court emphasized that if sundry credits are not proven, they should be disallowed and added to the assessee's income. Consequently, the Court allowed the department's appeal, reversing the Tribunal and restoring the assessment. Sales Tax Assessment Issue: The department raised a question regarding the addition of Rs. 4,000 based on a sales tax assessment for gross profit. Due to the insignificance of the amount, the Court declined to delve into this issue. However, the Court allowed the department's appeal concerning the sundry credits by overturning the Tribunal's decision and reinstating the assessment.
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