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TMI Blog1976 (10) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 made to the income of the assessee by the ITO for the asst. yr. 1971-72. Addition of Rs. 4,800 in the "Interest" account: 2. In the course of assessment proceedings for the asst. yr. 1971-72, the ITO found that the assessee firm had cash transactions with M/s Sultana Brothers, Ghoghardiha and that the assessee had all along a debit balance of this firm in its account books and that the openin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest from a particular firm or not, and as such the action of the ITO was not justified. In support of this contention appellant has quoted Hon'ble Tribunal's order in appeal ITA No. 630 and 611 of 1969-70 in ITAT Jaipur Bench, Jaipur reported in Taxation Vol. 31 pages 334, where it has been held by the Hon'ble Tribunal that, "It is not in dispute that the assessee has not charged interest. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Commissioner of Income-tax, Gujarat vs. A. Raman and Co(1). According to this authority, the income which accrues to a trader is taxable in his hands. However, the income which he could have, but has not earned, is not taxable as income accrued to him. This, the IT Act is only meant to take into consideration the incomes which have neither accrued nor arisen nor are deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent. In this way, he made an addition of Rs. 4,182 to the trading account of the assessee. 6. On appeal, the AAC reduced the sales from Rs. 1,90,000 to Rs. 1,85,000 and adopted the rate of gross profit at 4 per cent. Thus, he sustained the addition of Rs. 2,082. 7. The ITO has not referred to any comparable case to justify the adoption of the rate of gross profit at 5 per cent. His order cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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