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TMI Blog1995 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... stead of the peak credit of Rs. 4,47,471 as per books ? (2) Whether the Appellate Tribunal's view that the Income-tax Officer having rejected the books of account while determining the income from business, should not have relied upon the same books of account for the purpose of making addition towards unexplained credit under the head ' Other sources ' is sustainable in law ? " The assessee is an individual. The assessment relates to the year 1973-74. The accounting year is the year ended March 31, 1973. The assessee failed to comply with the notice issued by the Income-tax Officer under section 142(1). Accordingly, assessment was completed under section 144. The assessee had earlier returned a loss of Rs. 5,65,654 being his share inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed could not be relied upon. In the opinion of the Appellate Assistant Commissioner, since the Income-tax Officer had not relied on the books seized from the assessee's premises for the purpose of estimating the business income, there was no reason why he should depend upon these books for working out the peak credit. The Appellate Assistant Commissioner, therefore, held that the cash credit as found in the capital account of the assessee as per the balance-sheet, i.e., Rs. 3,54,110, should be taken for the purpose of considering it as income of the assessee under " other sources ". In that view of the matter, he gave a reduction of Rs. 93,631 being the difference between Rs. 4,47,741 and Rs. 3,54,110. Aggrieved by the order of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Rajaiahgari Kistaiah [1979] 120 ITR 294 (AP), wherein the court held that where certain unexplained cash credits are found in the account books of the assessee, whose business income is determined on estimate basis and not on the basis of his returned income, the Income-tax Officer is not prevented from treating the unexplained cash credits standing in the books of account as income from undisclosed sources which falls under the head " Income from other sources " unless the assessee, by independent and satisfactory evidence, establishes that the said cash credits are referable to the very same business the income of which has been determined on estimate basis. Lastly, learned standing counsel relied upon the decision of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer can reply upon the rejected account books for the purpose of making additions towards unexplained cash credit. In the present case, the assessee filed a balance-sheet showing a sum of Rs. 3,54,110 in the capital account. The Appellate Assistant Commissioner and the Tribunal held that when the assessee furnished a balance-sheet it is not reasonable on the part of the Department to work out a peak credit on the basis of the rejected account books for making additions in respect of unexplained cash credits. The Tribunal never said that the Income-tax Officer has no power or jurisdiction to rely upon the rejected account books for the purpose of making additions towards unexplained cash credit. What all the Tribunal pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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