9911796707
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Issues:
1. Whether the Tribunal was justified in deleting the addition of income from undisclosed sources? 2. Whether the intangible additions made to the income of the assessee in the past could be considered for the investment of disputed sum? Analysis: The judgment deals with a reference made by the I.T.A. Tribunal regarding the addition of income from undisclosed sources. The Tribunal found that the assessee, a registered firm, had discrepancies in its books of account, leading to additions by the ITO. Specifically, the ITO added Rs. 66,569 to the trading result due to low gross profit and Rs. 71,977 for unaccounted cash purchases. The assessee claimed that the disputed amount arose from intangible additions made in previous years. The AAC rejected this claim, upholding the addition. However, the Appellate Tribunal considered the evidence and held that the intangible additions from prior years could reasonably explain the investment in question. Consequently, the Tribunal accepted the assessee's contention and deleted the Rs. 71,977 addition. The judgment references a decision by the High Court in a similar case, emphasizing that additions to income in previous assessments are treated as the real income of the assessee. The court highlighted that such added income is available for investment in subsequent years. Drawing from this precedent, the court affirmed that the income added in previous years as intangible sources was indeed available to the assessee. Therefore, the court's answer to the reference question was affirmative, supporting the Tribunal's decision to delete the addition of Rs. 71,977. In conclusion, the judgment clarifies that income added in previous assessments is deemed available for investment in subsequent years. The court's decision aligns with the principle that additions to income from intangible sources in past assessments are considered real income available to the assessee. As a result, the Tribunal's deletion of the Rs. 71,977 addition was justified based on the explanation provided regarding the source of investment.
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