Bank credits treated as business turnover, but profit estimation reduced to a reasonable 4% margin for lack of supporting evidence.

Where bank credits are claimed to be pass-through amounts from commission agency activity, the claim must be supported by confirmations, agreements, or other material evidence; in their absence, the credits may be treated as business turnover. An estimate of profit at 12.5% on the entire credits was considered excessive because no comparable case or supporting material justified that rate. On the facts, a 4% margin was regarded as reasonable in similar trade circumstances, and income was directed to be estimated accordingly, granting partial relief.

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Issues: Whether the estimation of business income at 12.5% of total bank credits was justified, and whether the income should instead be estimated at a lower reasonable rate.

Analysis: The assessee's claim that the bank credits were merely pass-through amounts arising from commission agency activity was not supported by documentary evidence such as confirmations, agreements, or material from farmers or purchasers. In the absence of such evidence, the credits could be treated as business turnover. However, the adoption of 12.5% profit on the entire credits was found to be excessive because no comparable case or material was brought on record to justify that rate. In similar trade circumstances, a 4% margin had been accepted as reasonable.

Conclusion: The addition was not deleted in full, but the income was directed to be estimated at 4% of the total bank credits, resulting in partial relief to the assessee.

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