9911796707
TMI Blog1978 (7) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year under appeal (1969-70), the ITO made an addition of Rs. 8,000 in the trading results. The relevant potion of the assessment-order is as follows:- "Trading results are not verifiable and after discussion an addition of Rs. 8,000 is agreed in the trading results." Penalty-proceedings in respect of this addition of Rs. 8,000, were initiated and referred to the IAC of Income-tax vide s. 274(2) of the IT Act. The assessee submitted before the IAC that it maintained regular books of accounts, all purchases and sales were vouched, and accounts were opened closed and balance-sheet was filed. The assessee explained its concession for the addition in the trading-results saying that in the past additions to gross-profit were made si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to s. 271(1)(c) of the IT Act is on the assessee to prove absence of fraud, gross or wilful neglect. 6. In the case of the assessee, it was not in dispute that all the account books were regularly maintained. The purchases and sales were duly vouched and no mistake was found in these documents. The book-results were rejected solely on the ground that day-to-day stock was not tallied. Learned counsel showed us the original bills and vouchers which were produced before the ITO as well. A perusal of these documents would show that though technically the assessee was a wholesale-dealer in cloth, its sales were not confined to bales of cloth only. It sold cloth mostly in 'Thans'. It is true that the assessee was not a retailer in the sense tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been discussed in great detail by Hon'ble Untwalia, CJ (as he then was). In that case also an addition in trading-account was made on the ground that the assessee had not maintained day-today manufacturing-account or stock-account with the result that gross-profit was estimated at a higher rate. On this set of facts, it was held that the materials in the assessment order itself enabled the assessee to discharge its onus of proving that its failure to furnish the correct income i.e., the assessee's income was not as a result of any fraud or gross or wilful neglect on its part. 7. We, therefore, hold that the assessee in this case had discharged the burden cast on it under Explanation to s. 271(1) (c) of the Act to prove that there was no f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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