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Commissioner of Income-tax, Lucknow Vs. M/S. Gemini Leather Stores, AgrA. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI.T.R. No. 126 of 1973
Reported in(1976)5CTR(All)49
AppellantCommissioner of Income-tax, Lucknow
RespondentM/S. Gemini Leather Stores, AgrA.
Excerpt:
- - in the course of the assessment proceedings for 1956-57, the income-tax officer found that the assessee had carried on extensive business, details of which were not included in the account books, both for the previous year relevant for 1956-57, as well as in the assessment year 1954-55 and 1955-56. he also found that the purchases from certain local parties were not varifiable, and that consignments received at different railways stations specially at jajau railway station, were not recorded in the books......were not recorded in the books. he also found that the assessee had sent various amounts though bank drafts which were not accounted for. while enquiries were going on, the assessee, by a letter fated 6-3-1957 addressed to the inspecting assistant commissioner, made a disclosure of the turnover which was not accounted for in the books. in paragraph 9 of this letter, it was stated that the partners of the assessee firm had done business in their own names, and in the name of their relatives viz. hans raj, tilak raj, jagan nath and om prakash, and that the income thereof was legally that of the assessee. as regards bank drafts, it was stated that the partners had sent bank drafts to out stations;and consignments alleged by the income-tax officer to be that of the assessee were of the.....
Judgment:
ORDER

Singh, J. :- In complaince with as order of this Court under section 66(2) of the Indian Income-tax Act 1922, the Income-tax Appellate Tribunal, Delhi Bench C has referred the following for our opinion :-

'Whether upon the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in law in determining the assessees turnover for the assessment year 1954-55 at Rs. 4 lacs, for the assessment year 1955-56 at Rs. 3,50,000/- and for the assessment year 1957-58 at Rs. 6,56,003/- ?'

2. The assessee is a partnership firm dealing in the leather boards and purchase and sale of leather splits, waste leather, leather cutting etc. In the course of the assessment proceedings for 1956-57, the Income-tax Officer found that the assessee had carried on extensive business, details of which were not included in the account books, both for the previous year relevant for 1956-57, as well as in the assessment year 1954-55 and 1955-56. He also found that the purchases from certain local parties were not varifiable, and that consignments received at different railways stations specially at Jajau railway station, were not recorded in the books. He also found that the assessee had sent various amounts though bank drafts which were not accounted for. While enquiries were going on, the assessee, by a letter fated 6-3-1957 addressed to the Inspecting Assistant Commissioner, made a disclosure of the turnover which was not accounted for in the books. In paragraph 9 of this letter, it was stated that the partners of the assessee firm had done business in their own names, and in the name of their relatives viz. Hans Raj, Tilak Raj, Jagan Nath and Om Prakash, and that the income thereof was legally that of the assessee. As regards bank drafts, it was stated that the partners had sent bank drafts to out stations;and consignments alleged by the Income-tax Officer to be that of the assessee were of the firm. The assessee made a disclosure of a turnover of Rs. 1,50,000/-, Rs. 50,000/-, Rs. 2,50,000/- and Rs. 50,000/- for the four assessment years 1954-55 to 1957-58 respectively.

3. In this reference we are concerned with years other than 1956-57, which is the subject matter of I.T.R. No. 70 of 1972 decided by us on 17.7.1975 (M/s. Gomini Leather Stores, Agra vs. The Commissioner of Income-tax, U.P. Lucknow (1976) C.T.R. (All.) 52.

4. The Income-tax Officer estimated the sales for the year 1954-55 at Rs. eight lacs, for 1955-56 at four lacs and for 1957-58 at Rs. seven lacs. On appeal, before the Appellate Assistant Commissioner, the estimate of sale for the year 1954-55 was reduced to five lacs, but estimate of four lacs for the year 1955-56 was upheld. In respect of the year 1957-58 it was reduced to six lacs. On appeal, the Tribunal held that for the year 1954-55, the estimate of four lacs appeared to be on the high side, taking into consideration the fact that it was the first year of the assessees business, and the accounting period consisted of only about eight months. For the year, 1955-56, the assessee had declared suppression of turnover of Rs. 50,000/- while the value of unaccounted consignments of goods through railway receipts had been estimated at Rs. 38,400/- and unaccounted bank drafts at Rs. 16,263/-. The Tribunal held that the amount of Rs. 50,000/- disclosed by the assessee consisted in part of the unaccounted consignments of goods and bank drafts and, as such, reduced the estimate of turnover at Rs. 3,50,000/-. For the year 1957-58, the assessee had intimated suppression of turnover of Rs. 50,000/-. In this year too, there were unaccounted consignments of goods received through railway amounting to Rs. 76,200/- and unaccounted bank drafts of Rs. 64,000/-. The Tribunal following the principles laid down in its order disposing of the appeals for the assessment year 1956-57 held that the estimate of Rs. 6,56,003/- made by the Appellate Assistant Commissioner appeared to be reasonable. In view of these findings and the material on which they are based, it cannot be said that there was no material before the Tribunal on estimating the assessees turnover at the figures found by it. The material consisted of the disclose of turnover made by the assessee, unaccounted consignments and bank drafts.

5. We accordingly answer the question in the affirmative. There shall be no order as to costs. Counsels fee is assessed at Rs. 200/-.


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