1980 (2) TMI 118

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....974; Rs. 5021 on21st Nov., 1974; and Rs. 5000 on15th Jan., 1975. Smt. Kiran Devi is the wife of Shri Pyare Lal, partner of the firm. The other three partners of the firm are her sons. Although the lady appeared before the ITO and confirmed having given the aforesaid sums to the firm, he disbelieved her statement and held that she was only a tool in the hands of her husband and sons. He accordingly held that the aforesaid sums represented the assessee firm's income from undisclosed sources. 3. The AAC has deleted this addition as he was satisfied that the source of the aforesaid deposits had been satisfactorily explained by the firm. In coming to this conclusion, the AAC had relied on the fact that Smt. Kiran Devi has been assessed to inc....

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.... the circumstances, we hold that the AAC was justified in coming to the conclusion that the assessee firm had been able to discharge the burden of proof regarding the genuineness of the aforesaid deposits which rested on it. 6. The second and last ground relates to the deletion by AAC of a sum of Rs. 40,000 added by the ITO to the trading results declared by the assessee. The assessee firm had disclosed a gross profit of Rs. 1,68,781 on sales of Rs. 18,84,269 which worked out to 9.2 per cent as against the gross profit rate of 12.4 per cent on sales of Rs. 10,14,987 in the immediately preceding year. The ITO observed that the assessee firm had placed an unduly low valuation on its closing stock; that its cash sales were made at lower rat....