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TMI Blog1981 (6) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The first contention relates to the addition of Rs. 3,900 in the trading account. The ITO pointed out certain defects for invoking the proviso to s. 145(1) and estimating the turnover as well as the rate of GP to make an addition of Rs. 3,900. He has also mentioned that the sales tax authorities had also pointed out major defects and resorted to estimate the turnover. On appeal the action of the ITO was confirmed by the AAC. 3. The ld. counsel for the assessee reiterated the ground No. 2 and argued that the ITO is not justified in invoking the proviso to s. 145(1), as it was virtually impossible to maintain manufacturing stock registers and there was strict control over supplies both by the Government and the Mills and the quantity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 16 per cent is not called for. In the past the rate of G.P. shown by the assessee varied from the 14per cent to 15.3 per cent. In the circumstances, therefore, we are of the view that the addition in the trading account is not justified and it should be deleted. 6. The second contention relates to the addition of Rs. 11,000 representing cash credits as income of the assessee. The ITO found cash credits amounting to Rs. 11,000 in the name of the assessee's son Mr. K. Abbas. After recording a statement from Mr. Abbas the ITO was of the view that there was no evidence to show that he had been doing commission business or possessing the cash all the while. Therefore he held that the cash credits were not satisfactorily explained. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in disbelieving the version of the creditor that he was not in a position to deposit the money in the bank and operate the account. Further he vehemently disputed the assessment of cash credit as the income of the assessee when the creditor accepted the fact of advancing Rs. 11,000 to the assessee. Therefore, he urged that the AAC is not justified in sustaining the addition of cash credit and, therefore, urged that it should be deleted. 9. The ld. Detpl. Rep. on the other hand has supported the findings given by the authorities and urged that in the absence of an iota of evidence for the various averments made by the creditor before the ITO, the addition should be sustained. In support of his argument he took us through the statement give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harging on the bills and the basis on which the commission is charged by you? A. there is no percentage of such. Whatever the customers give I used to take it. Q. 10. Mr. Abbas excepting what you say orally, can you make me to believe by any evidence that you have been doing small commission business and that you have earned a substantial sum and you were keeping it in your hand, right through till you deposited the amount with your father? A. There is no evidence". From a perusal of the extract it would be abundantly clear that the creditor is alleged to have been doing commissioner business in stationery since his school days, but he was not able to mention the persons from whom he had been receiving the commission. Nor he was able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abundantly clear that there is no iota of evidence and the overall effect by the assessee or the creditor is not satisfactory in the absence of any evidence in support of the various averments made in the sworn statement. The fact that the creditor has been allegedly carrying on commission business is within his personal knowledge and according to s. 104 of the evidence Act, the burden is on him to prove the same with evidence. In this case the creditor himself has admitted in response to query No. 10 that there was no evidence. Therefore, the creditor has not discharged the onus lying on him. The assessee's mere production of the creditor or the mere statement of the creditor itself does not amount to explaining the nature and source of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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