Estimated income addition from money-lending business rejected where past results and cash book pattern were consistently accepted.

Estimating income from a money-lending business solely at 20 per cent of capital employed was unjustified where the assessee's results had been accepted in earlier years and the same cash book pattern was not disturbed in the subsequent year. On the totality of the circumstances, the authorities could not reject the trading result merely because the return appeared low. The estimated addition was therefore not sustainable and was deleted.

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Issues: Whether the addition made by estimating the income from the money-lending business at 20 per cent of the capital invested was sustainable.

Analysis: The assessee's money-lending results had been accepted in earlier assessment years, and the same cash book pattern had also not been disturbed in the subsequent assessment year. On the totality of the circumstances, the authorities below were not justified in rejecting the result shown by the assessee and in making an estimated addition solely on the basis of the capital employed and the perceived low return.

Conclusion: The addition was not sustainable and was deleted.

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