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TMI Blog1978 (4) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... s a registered firm by the Income Tax Officer. The first contention raised in this appeal relates to addition of Rs. 21,176 to the disclosed trading results. The assessee had disclosed a gross profit rate of about 25 per cent on total turnover of Rs. 85,432. According to the Income Tax Officer, the sales were not supported by the vouchers. He further observed that on the basis of the local inquiry made by him the assessee's sales were considered low. Thus according to the local inquiries the Income Tax Officer estimated the sales at Rs. 450 per day or Rs. 1,64,250 per year. He further found that the closing stock was not varifiable and the purchases and expenses were also not subject to proper check. In this view of the matter, the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer is accordingly directed to modify the addition in respect of gross profit. 6. The next contention relates to addition of Rs. 27,800 as income from undisclosed sources. While going through the books of account of the assessee, the Income-tax Officer came across the under-mentioned cash credits in the respective accounts. Rs. 20,000 from Behari Lal Rs. 5,200 from Shri Besant Lal Rs. 10,000 from M/s. Young Auto Finance Rs. 6,000 from Shri Krishnan Singh Rs. 3,000 from Shri Avtar Krishnan and Rs. 1,000 from Shri Ramji Dass. The Income-tax Officer examined these parties and came to the conclusion that the aforesaid parties did not have enough sources to make the said deposits. he accordingly treated the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that Shri Behari Lal, Ramji Dass, Subhash Chand and Sat Pal were name lenders and had no funds to advance Shri Gurcharan, partner of the assessee firm. He, therefore, treated a sum of Rs. 27,800 as assessee's income from undisclosed sources. This addition was upheld by the Appellate Assistant Commissioner in appeal and the assessee Shri Gurucharan has come up in appeal before us. 9. It is not necessary to delve with into this question about the assessability of cash credits for the reasons which we shall presently state. The authorities below have proceeded to assess an identical amount of Rs. 27,800 as cash credits u/s. 68 of the Act in the hands of the assessee firm as well as in the hands of the partner Shri Gurcharan presumably un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments. The whole matter has been approached by the authorities below in a cuvalier manner in utter disregard of the accepted principles. We have, therefore, no alternative but to remit the matter to the Appellate Assistant Commissioner with a direction that he should re-examine the entire question of assessability of the amounts in respect of which the assessee's explanation is not found satisfactory should bring to tax the amount in question in respect of which the explanation is not satisfactorily either in the hands of the firm or in the hands of the partner depending upon his finding which he may reach on the basis of proper inquiries. We accordingly set aside the order of the Appellate Assistant Commissioner so far as the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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