TaxTMI 
TaxTMI 
1984 (8) TMI 109
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....." 2. The assessee is a registered firm and is a wholesale and retail dealer in ball bearing. The assessee has shown a total turnover of Rs. 38,30,515 for the asst. yr. 1979-80 as against the turnover of Rs. 64,51,214 for the immediately preceding assessment year. The gross profit rate disclosed in the assessment year under appeal is 7.5 percent against the gross profit of 7.1 percent as shown in the immediately preceding assessment year. The turnover recorded a fall this year due to strike in the factory at Poona of the suppliers of ball bearing namely SKF Co. Total cash sales during the period beginning from 4th Dec., 1977 to 16th Jan., 1978 worked to the tune of Rs. 5,98,090 and the individual items of cash sales were small varying bet....
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....oned period. It was also stated on behalf of the assessee before the ITO that it was not possible for the assessee firm to identify and of the buyers who made purchases during the above period and that it was not possible to specifically identify the source of any of the High Denomination Notes which got accumulated upto 19th Jan., 1978. The IT came to the conclusion that the assessee was not in a position to give any satisfactory reason for making cash sales during the period 4th Dec., 1977 to 16th Jan., 1978. He was also of the view that the source of High Denomination Notes worth Rs. 4,26,000 remained unexplained. He accordingly added this amount as the concealed income of the assessee and included the same in the assessment for this yea....
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....proper foundation nor a proper basis for the addition of Rs. 4,26,000 on the grounds indicated by him in the assessment order. So considering the entire facts and circumstances of the case the CIT(A) concluded that the addition of Rs. 4,26,000 as income from undisclosed sources was neither proper nor reasonable. This addition was accordingly deleted. Dissatisfied the Revenue has come up now in appeal before the Tribunal. 5. The S.N. Sarkar, the ld. departmental representative, high lighted the fact that in the year of account relevant to the asst. yr. 1979-80 most peculiar feature was the cash sales effected to the tune of Rs. 4,26,000 though in the earlier years most of the sales were effected through cheques. It was urged that the expla....
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....s then contended that the assessee failed to establish any nexus between the High Denomination Notes and cash sales. The assessee also failed to explain the source of High Denomination Notes. It was thus submitted that the CIT(A) was wrong in deleting the addition of Rs. 4,26,000 included in the assessment as concealed income. 6. Sri A.M. Parikh, the ld. authorised representative for the assessee, on the other hand, has fully supported the order of the CIT(A). It was contended that because of the lock out in the Poona Factory of the SKF Co., the assessee had first been orally instructed on 4th Dec., 1977 to make cash sales to small consumers and thereafter written instructions were issued vide letter dt. 26th Dec., 1977. It was pointed ou....
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....he earlier year. The assessee has also filed two paper books which have been perused by us. 7. There is no dispute in this case that the factory of SKF Co., at Poona was closed down from 4th Dec., 1977 onwards due to strike. The said company advised the assessee firm vide its letter dt. 26th Dec., 1977 to supply ball bearings to its customers at reasonable rates. Before us it was further pointed out by the ld. authorised representative for the assessee that oral instructions to that effect had been received in advanced by the assessee company and for this reason w.e.f. 4th Dec., 1977 it started making cash sales to small consumers. It is of utmost significance that cash sales amounting to Rs. 5,98,090 have not been doubted or disputed by ....