ADDITIONAL COMMISSIONER OF INCOME TAX Vs. KARACHI KAMPATWALA

JUDGEMENT

(1.) THE assessee filed his return on a total income of Rs. 9,003 for the assessment year 1968-69. THE ITO rejected the books of account of the assessee holding that they were unreliable and assessed the income at Rs. 25,530. On appeal, the income was finally reduced to Rs. 17,030.

(2.) PENALTY proceedings were initiated. The IAC held that the concealment was to the tune of Rs. 8,301. He imposed a penalty of Rs. 9,000. On appeal, the Tribunal held that the account books were rejected because of a survey made by the Sales Tax Officer in which he found that there were two note books for the period 1st July, 1967, to 2nd August, 1967. During this period sales to the tune of Rs. 4,014 were found to have been suppressed. This was the only factor which raised suspicion. The Tribunal held that in the circumstances the concealment of sales has been proved to the extent of Rs. 4,014. On this the assessee could have earned an income of Rs. 1,003 at the rate of 25% of the turnover. Hence, the Tribunal imposed a penalty of Rs. .1,003 on the assessee. At the instance of the Commissioner, the Tribunal has referred the following question of law for our opinion :