ASHOK KUMAR RASTOGI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) UNDER S. 256(2) of the IT Act, ITAT, Allahabad Branch, Allahabad has referred the following two questions to this Court for its opinion:

(2.) ON 13th Aug., 1976 a raid was conducted on the residential premises of the assessee, who is an individual, as a result of which 244 documents were seized. As some of these documents related to transactions relevant to the asst. yr. 1976-77 in question, the ITO after giving an opportunity of being heard to the assessee passed the assessment order, whereby these transactions were totalled at Rs. 4,24,396 and profits were estimated at Rs. 42,440 at the rate of Rs. 10%. To this profit of Rs. 42,440 a sum of Rs. 50,000 was added an unexplained investment in the unexplained business. In this manner a total sum of Rs. 92,000 was assessed as income from unexplained sources. The Assessing Officer also made two additions of Rs. 3,693 and Rs. 4,747 as income from other sources on the basis of seized vouchers. The assessee challenged the assessment order by filing an appeal before the CIT(A) which was dismissed against which the assessee filed a second appeal before the ITAT, which has also been dismissed. Under S. 256(2) of the Act the Appellate Tribunal has referred the aforesaid two questions to this Court.

(3.) AS mentioned hereinbefore, no evidence or material has been referred to or relied upon for treating the aforesaid sum of Rs. 50,000 as unexplained investment and the only circumstance, which has been referred in this connection is the estimated sale of Rs. 4,24,396. From the estimated sale it cannot necessarily be inferred that the assessee has invested Rs. 50,000 in some unexplained business. It being not a necessary inference is a pure guess an the findings seem to be based on surmises and conjectures without there any evidence or material in support thereof.