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TaxTMI 
TaxTMI 
TaxTMI 
2005 (7) TMI 98
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....the Assessing Officer's action in making addition of Rs. 89,000 (should be Rs. 89,500) on account of income from undisclosed sources within the meaning of section 68 of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that no separate addition under the head "Income from undisclosed sources" within the meaning of section 68 of the Income-tax Act, 1961, is called for ?" 2. The brief facts of the case are as follows : The assessee/opposite party (hereinafter referred to as "the assessee") is a partnership firm and was deriving income from the business of manufacture/ assembly of diesel engine sets and diesel generating sets. For the year under considerati....
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....cepted, an additional 273 complete injectors can be considered to have been consumed. Of course, certain observations of the Income-tax Officer, like paucity of staff and sale out of books are not supported by facts. The assessee has debited a sum of Rs. 82,210 in the wages account. Moreover, replacement for some of the customers cannot be ruled out because a new manufacturer in the line has to create goodwill in the market. If a credit for 273 more injectors is given, it will amount to extra consumption of 273 injectors valued at 273 x Rs. 170 = Rs. 46,410. When reduced from the addition of Rs. 1,89,080 extra consumption would come to Rs. 92,650. Some margin can be given for defective pumps as well as from replacement to buyer. The additio....
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.... challenging the reduction of addition from Rs. 1,50,980 to Rs. 89,500. The Tribunal rejected both the appeals filed by the assessee as well as the Revenue and sustained the order of the Commissioner of Income-tax (Appeals). The Tribunal held as follows : "We have given our careful consideration to the rival contentions. On the basis of evidence on record it cannot be disputed that the assessee's venture in the manufacture of diesel engine sets has not been successful. Though the assessee was not under an obligation to replace the fuel injector sets manufactured by M/s. Mico in respect of the generating sets yet there is some evidence that the assessee did replace fuel injector sets in some of the cases. The fact that ISI mark was ca....
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....ad been made. The estimate made by the Commissioner of Income-tax (Appeals) seems to us most reasonable and no interference is called for. The addition thus sustained on account of excess consumption of fuel injector equipment sets is hereby confirmed. It is not necessary for us to deal with the contention on behalf of the assessee regarding addition on account of dealers deposit, as no separate addition has been sustained by the Commissioner of Income-tax (Appeals) on that account. However, we would like to mention that in respect of the 5 years of the deposits of Rs. 200 each assessee had produced evidence and the Assessing Officer could not have rejected the same unless the statements made by the depositors were to be wrong. The mere fa....
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....r has failed to prove the genuineness of the deposit, identity and creditworthiness of such depositors. Learned counsel for the assessee submitted that the question raised did not arise from the order of the Tribunal because no appeal was filed by the Revenue before the Tribunal against such deletion and the contention of the assessee regarding addition on account of the dealer deposit has not been dealt with by the Tribunal because no separate addition has been sustained by the Commissioner of Income-tax (Appeals) on that account. 6. We have perused the order of the Tribunal and the authorities below. A perusal of the order of the Commissioner of Income-tax (Appeals) shows that the Commissioner of Income-tax (Appeals) has sustained the ad....