It is the assessee who is in full possession of facts regarding the true character of the amounts and the sources from which they v/ere derived and Section 106 of the Evidence Act casts on him the burden of proving what lies within his special knowledge.
S. Kumaraswami Reddiar vs Commissioner Of Income-Tax on 20 March, 1959
Equivalent citations: AIR 1960 Ker 9
Bench: V Iyengar, A Chandy
1. This is a reference under Section 66 (2) of the Indian Income-tax Act, by the Income-tax Appellate Tribunal, Madras Bench. The question referred is :
"Whether on the facts and in the circumstances of the case, an addition of the sum of Rs. 25,856 having been made to the profits and gains of the business carried on by the assessee, the further addition of the sum of Rs. 17,402 representing the total of the credits in the books and deposits in the banks in the account year, is lawful".
The assessee, S. Kumaraswamy Reddiar, is a wholesale and also retail piecegoods merchant carrying on business at Alleppey and Quilon. In computing the profits on the assessee's business for the assessment year 1123 M.E. the Income-tax Officer found that the accounts maintained by the assessee were unreliable and the profits had therefore to be estimated. Accordingly he made an addition to the book version of the profits to the extent of Rs. 26,418 in respect of the Alleppey business and Rs. 11,438 as regards the Quilon business. He further found that certain deposits in banks and certain advances entered in the books of account at the Head Office totalling Rs. 83,926 were only secret profits. The petitioner was assessed on this amount also. In appeal by the petitioner to the Appellate Assistant Commissioner, Trivandrum, the estimated addition made by the Income-tax Officer was upheld but only to the extent of Rs. 14,418 for the business at Alleppey and Rs. 11,438 for Quilon together making up Rs. 25,856.
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