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TMI Blog2008 (12) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities below were fully justified in estimating the income from the business on the best judgment basis - deduction on account of disallowance of opening capital was made on account of the failure of the assessee to explain the source of opening capital in a satisfactory manner – decided against the assessee - 1585 of 2008 - - - Dated:- 5-12-2008 - MRS. PRABHA SRIDEVAN and K. K. SASIDHARAN JJ. K. Soundararajan for the appellant. J. Narayanasamy for the respondent. JUDGMENT The judgment of the court was delivered by K. K. SASIDHARAN J. - This tax case is directed against the order dated June 25, 2008, in I. T. A. No. 1288/2006 on the file of the Income-tax Appellate Tribunal, Chennai, against the order of the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the various issues ?" Factual matrix: 3. The assessee is a dealer in Indian made foreign liquor and for the assessment year 2002-03, he filed his return of income wherein a sum of Rs. 52,970 was shown as total income. Since the assessee did not produce the books of account despite the direction given by the Assessing Officer, a best judgment assessment was made by determining the net profit at the rate of 5 per cent. of the total sales of Rs. 71,20,310 and accordingly, the net profit was arrived at Rs. 3,56,016. The Assessing Officer was not inclined to accept the opening balance of capital shown by the assessee at Rs. 5,73,960 and accordingly, 50 per cent. of the opening balance was allowed and a sum of Rs. 2,86,980 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the finding of the Assessing Officer as well as the Commissioner (Appeals) disallowing 50 per cent. of the opening balance was on the basis of materials and as such, no case was made out for deleting the addition of Rs. 2,86,900 as made by the Assessing Officer. Accordingly, the appeal was dismissed. It is the said order which is challenged in the present tax case. 6. The learned counsel for the assessee contended that when the Revenue accepted the returns filed by the assessee for the year ending 2001-02 without any objection, the Assessing Officer was not justified in rejecting the opening balance shown by the assessee. No other point was canvassed before us and as such, the scope of this tax case is confined to the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income-tax, in the appeal preferred by the assessee confirmed the addition only to the extent of Rs. 1,25,000 on account of the low gross profit. 10. The assessee had filed a bunch of returns for the period from 1996-97 to 2001-02 and for the assessment year in question he had shown an opening balance of Rs. 5,73,960. Even though the onus was on the appellant to show that the amount claimed to be the opening capital was accumulated over the years, he was not in a position to substantiate his contention before the assessing authority as well as before the Commissioner of Income-tax about the source of opening capital. Even before the Tribunal the assessee failed to prove the formation of capital. In view of the failure on the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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