COMMISSIONER OF INCOME TAX Vs. SANJAY CHHABRA

JUDGEMENT

(1.) This appeal under Section 260A of the Income-tax Act, 1961 (for short ''the Act''), has been filed by the Revenue against the order dated April 28, 2005, passed by the Income-tax Appellate Tribunal Chandigarh Bench ''B'', Chandigarh (in short ''the Tribunal'') in I.T.A. No. 264/Chandi/2004, relating to the assessment year 1999-2000.

(2.) The appeal was admitted by this Court for determination of the following substantial question of law:

(3.) The facts, in brief, necessary for adjudication as narrated in the appeal are that the Assessee is engaged in the business of a commission agent and he derives income by way of commission from the sale of vegetables and fruits on behalf of farmers and traders. During the course of survey under Section 133A of the Act, carried out at the business premises of one Jagdish Chawla, the proprietor of M/s. Sai Baba Fruit Company, Chandigarh, certain documents were seized. From the seized documents it transpired that the Respondent-Assessee had made sales of apples to the rune of Rs. 5,75,654 to the aforesaid Jagdish Chawla. It was further noticed that as on October 6, 1998, the Assessee had the debit balance of Rs. 4,20,856 in the name of Jagdish Chawla. Since the sales were not found to be verifiable, the Assessee was asked to explain why addition of the amount of Rs. 5,75,654, being the peak investment, be not made to the returned income on account of unaccounted sales to Jagdish Chawla. The Assessing Officer did not accept the explanation of the Assessee and made addition of Rs. 5,75,654, vide order dated March 21, 2002, holding that the Assessee had made sales to Jagdish Chawla and invested his own unexplained money in the purchase of apples.