S K TRADERS Vs. CIT

JUDGEMENT

(1.) This appeal has been preferred under Section 260A of Income Tax Act, 1961 by the Assessee against order dated 11-6-2004 of the Tribunal, Chandigarh Bench, passed in ITA No. 281/Chd/1998 in respect of assessment year 1995-96.

(2.) The Assessee derives income from manufacture and sale of rice and its by-product. During search at the premises of M/s Partap Bhangu Solvex (P) Ltd., village Pasiana, a diary containing the details of rice bran purchased by that company from various persons including the Appellant was seized. In the said diary there were entries pertaining to purchases made from the Appellant and on being confronted, the Assessee vide letter dated 24-3-1995 admitted the correctness of said entries and surrendered a sum of Rs. 7.50 lacs as undisclosed income subject to no penalty and no prosecution. The basis of surrender by the Assessee was under-billing in the rates of by-products and sale of the by-products outside the books of account. Accordingly, the amount surrendered was taxed as undisclosed income. The addition was deleted by Commissioner (Appeals) but the Tribunal restored the same. It observed:

(3.) The appeal was admitted to consider following substantial question of law claimed by the Assessee: