Circumstantial evidence supports assessment of undisclosed business income; credited cash held assessable and finding upheld.

Circumstantial evidence comprising extraordinarily low declared net profit relative to turnover, comparative profit ratios of similar mills, absence of contemporaneous home chest records, unexplained cash credits in family/business accounts, and reconstructed family accounts across years provided a sufficient factual basis to infer undisclosed or secreted business profits; accordingly the credited sum of Rs. 49,300 was held assessable as income and the Tribunal's finding was sustained in favour of the revenue after the assessee was afforded opportunity to explain accounting differences.

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Issues: Whether there was legal evidence to support the Tribunal's finding that Rs. 49,300 constituted part of the assessee's income for the accounting year.

Analysis: The material relied upon comprised circumstantial evidence including extraordinarily low declared net profit relative to turnover, comparative profit ratios of similar mills, absence of contemporaneous home-chest accounts, unexplained cash credits in the family/business account, and the results of reconstructed family chest accounts over prior years. The authorities examined multi-year accounts and afforded opportunity to the assessee to address comparative figures and accounting differences. These factors, taken together, provided a factual basis from which an inference of undisclosed or secreted business profits could be drawn and supported a finding that the credited sums were assessable income.

Conclusion: There was legal evidence to support the Tribunal's finding that Rs. 49,300 formed part of the assessee's income; the finding is upheld in favour of the Revenue.

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