1980 (1) TMI 21

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....y this court in M.C.C. No. 305 of 1970, the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion: " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in giving a finding that the amount of Rs. 15,300 which was added as income from undisclosed sources, was covered by the intangible additions mad....

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....failed to satisfactorily explain the cash credits amounting to Rs. 15,300 appearing in the books of account of M/s. Daluram Pannalal. The ITO, therefore, held that the sum of Rs. 15,300 was the assessee's income from undisclosed sources and the assessee was assessed accordingly. The assessee preferred an appeal before the AAC, who reduced the turnover of the business carried on in the name of Gaja....

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....ing a reference, but that application was rejected. The Commissioner then preferred an application under s. 256(2) of the I.T. Act, 1961, to this court. That application was allowed and, as directed by this court, the Tribunal has stated the case and referred the aforesaid question of law to this court for its opinion. Having heard learned counsel for the parties, we have come to the conclusion....

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.... represented income from undisclosed sources. This finding was not set aside either by the AAC or by the Tribunal. The Tribunal seems to assume that once the business income is estimated, the unexplained cash credits would be covered by the income so estimated. This assumption is not warranted by law. Without setting aside the finding of the ITO that the cash credits represented income from undisc....