INCOME TAX OFFICER Vs. NAHAR SINGH SADHU SINGH

JUDGEMENT

(1.) THE Revenue has filed this appeal under S. 260A of the IT Act, 1961. It raises the following question for decision :

(2.) THE assessee is a partnership firm. It is doing the work of commission agent. For the asst. yr. 1991 92 the assessee showed an income of Rs. 77,030. The AO made an addition of Rs. 1,82,988 and fixed the taxable income at Rs. 2,60,018. Aggrieved by the order, the assessee filed an appeal. The CIT(A) vide order dt. 30th June, 1992, found that two of the partners had agricultural land measuring 35 acres and 10 acres. They had sold wheat and narma crops. As a result, it had the requisite amount to invest towards the capital account of the firm. Thus, the addition made by the AO was set aside.

(3.) MR . Sawhney contends that the AO had rightly made the addition by treating the amount as the undisclosed income of the firm. In support of the contention he had placed reliance on the decision in Smt. Shanta Devi vs. CIT (1988) 68 CTR (P&H) 52 : (1988) 171 ITR 532 (P&H) : TC 42R.1125.