Income Tax Appellate Tribunal - Agra
Umesh Chandra Garg vs Asstt. Cit on 27 July, 2004
Equivalent citations: (2004)91TTJ(AGRA)549
ORDER
I.S. Verma, J.M. In this appeal the assessee has objected to the order of the Commissioner (Appeals), dated 22-2-2002, by way of the following grounds :
"1. Because the authorities have erred in not accepting the rate of commission on discounting of drafts as disclosed.
2. Because the rate of commission estimated by the authorities is without any basis/material/evidence brought on record.
3. Because the authorities have erred in relying on decision of Tribunal in the case of C.K. Telang without appreciating the difference in the facts of both the cases.
4. Because the authorities have erred in making separate addition of Rs. 35,000 which, though shown as income from other sources, was in fact income from commission as submitted before assessing officer and Commissioner (Appeals).
5. (a) Because the authorities have erred in charging interest under section 234A on assessed income.
(b) Because the authorities are not justified in charging under sections 234B and 234C of the Act as the assessee had no liability under section 208 to pay advance tax and the estimate of income at higher rate could not have been anticipated.
(c) Because the levy of interest is not justified as the Supreme Court decision in CIT v. Anjum MH. Ghaswala & Ors. (2001) 252 ITR 1 (SC) is not applicable to the facts of the case."
2. At the time of hearing, learned counsel for the assessee submitted that he was not pressing ground Nos. 5 (a), (b) and (c) and, therefore, the same stands dismissed as such.
3. So far as ground Nos. 1 to 4 are concerned, the learned counsel for the assessee submitted that the issues involved in this appeal are as under
(i) The first issue is against the rejection of assessee's books of account and consequential determination of assessee's income from commission received on account of discounting of demand drafts (DDs) by applying the net rate of Rs. 3.50 per Rs. 1,000.
(ii) The other issue is against the addition of Rs. 35,000 because as per assessee, the income of Rs. 35,000 shown as income from other sources was part of the income from commission.
4. I have heard the learned counsel for the assessee as well as the learned Departmental Representative.
5.1 So far as facts relating to the first issue are concerned, the same, as has been borne out from the records, are that the assessee was carrying on the business of discounting of DDs brought by various outside customers who used to come to Firozabad for making purchases. Since it is well known that Firozabad is a city of glasswares and glass bangles, various customers from far and away visit Firozabad daily and for the sake of safety bring DDs instead of cash. The parties coming to Firozabad bring these DDs in their own names because they are not sure as to which party they will be able to strike deal with. These parties, after coming to Firozabad used to contact various persons who are carrying on the business of discounting of drafts and get cash in lieu thereof for which the parties discounting the drafts charge commission at different rates, i.e., depending upon one's goodwill. The assessee has been carrying on this business for the last many years as is evident from para 3.1 of its written submissions filed before the Commissioner (Appeals) wherein the assessee has shown to have carried on this business since assessment year 1994-95 and had been charging commission at different rates. Initially the assessee used to charge commission @ 75 paise per thousand which was later on increased to Re. 1 per Rs. 1,000 and during the relevant assessment year 2000-01 the assessee declared commission @ Re. 1 per Rs. 1,000 on an amount of Rs. 12,17,40,268 (discounted drafts) and @ Rs. 2 per Rs. 1,000 on an amount of Rs. 56,33,392. While furnishing the return of income, the assessee declared another income of Rs. 35,000 from other sources and claimed the sum to be out of commission on discounting of drafts. The assessee, therefore, claimed that the rate of commission during this period after considering the income of Rs. 35,000 came to be Rs. 1.35 per thousand.
During the course of proceedings under section 143(3) of the Income Tax Act, the assessing officer relied on the decision of Tribunal, Agra Bench, in the case of C.K Telang v. Assistant Commissioner, for assessment year 1990-91 in ITA No. 4538/Del/1993, dated 24-7-2001, wherein the Tribunal had directed the assessing officer to compute the income from discounting of drafts by applying 0.6 per cent commission rate on the value of drafts. But, after allowing deduction on account of expenses to the tune of Rs. 0.5 per cent. applied a net commission rate of 0.35 per cent (Rs. 3.50 per Rs. 1,000) on the total value of the drafts discounted by the assessee which resulted in the assessment of assessee's income from commission at Rs. 4,26,091 as against income of Rs. 61,067 declared by the assessee on this account. The assessing officer effected.' the addition of Rs. 35,000 also as shown by the assessee. The assessee went in appeal before the Commissioner (Appeals) and submitted the written submissions which read as under
"This appeal is against the assessment order under section 143(3) of the Act, dated 5-12-2001.
2.1 . ..............
2.2 The assessing officer has taken the view that the commission at Rs. 5 per thousand would be reasonable. From this he has allowed Rs. 1.5 per thousand for expenses. The net commission at Rs. 3.50 per thousand has been worked out at Rs. 4,26,091. For the rate of 0.5 per cent he has relied on the Tribunal's decision dated 24-7-2001 in the case of C.K. Telang v. Asstt. CIT for the assessment year 1990-91 carrying on similar business at Firozabad (paper book 1 and 2). In the case of CK Telang (supra), net income of Rs. 12,312 at Re. 1 per thousand had been shown which was accepted by the department. The assessing officer had made addition of peak credits in bank under section 69 and against this addition, appeal was filed with Commissioner (Appeals). There was no ground of appeal relating to declared income (paper book p. 3). The appeal was dismissed. In appeal before Tribunal also there was no ground of appeal in respect of business income (paper book p. 4). The addition under section 69 was deleted by the Tribunal but.directed that income be computed at Rs. 5 per thousand. As this issue did not arise for consideration in any order of the authorities below and was not raised before the Tribunal, the Tribunal has exceeded its jurisdiction by giving a finding on an issue not raised before it. However, the reasons given for such increase in rate are If somebody goes by the income from drafts discounting business declared by the assessee, hardly it comes around to Rs. 1,000 per month. In other words, per day income will be around Rs. 50. Considering that about 20 days a month, the assessee goes to the bank for such purpose, Rs. 50 was hardly enough to meet even the transportation and other charges.' 2.3 The Tribunal's finding is based purely on surmises. The assessee was not even heard on this issue. Even otherwise, the Tribunal's order is on the peculiar facts of that case. In the assessee's case, the volume of business is substantially higher and even after meeting the expenses there is no profit between 40 to 50 per cent of the receipts. The above observation of the Tribunal were brought to the notice of assessing officer by explanation dated 5-12-2001 with the remark that these are not applicable in the case of assessee but he, has summarily rejected the same.
3.1 The assessee is an old taxpayer right from the assessment year 1984-85. The business results for the past few years are as under:
Asst. yr.
Value of drafts discounted Commission Rate of commission per 1000 Net income shown 1994-95 17,59,26,525 1,32,190 0.75 64,090 1995-96 22,42,52,678 1,68,190 0.75 81,640 1996-97 17,99,51,759 1,79,950 1 95,110 1997-98 16,19,85,577 1,61,980 1 82,950 1998-99 15,23,09,397 1,52,300 1 74,835 1999-2000 24,81,61,650 2,48,61 1 1,43,229 2000-01 12,17,40,268 1,27,481 1.04 61,066 Add additional income offered in return 35,000 1,62,481 1.35 96,066 3.2 The income returned by the assessee in all the earlier assessment years has been accepted by the department. The commission receipts this year are at higher rates as compared to immediately preceding assessment years. The net profit from commission, after deducting all expenses, is also significantly better. The assessing officer has not brought onrecord any comparable cases showing receipt at Rs. 5 per thousand. The decision of Tribunal in Telang's case (supra) is not applicable, because
(i) the issue regarding business income did not arise from the orders of assessing officer or Commissioner (Appeals) and was not raised in grounds of appeal before Tribunal. The rate was increased without even hearing the appellant on this issue.
(ii) The turnover was only Rs. 1.23 crores as against Rs. 12.17 crores of the assessee.
(iii) The business income was found adequate to meet the day-to-day expenses whereas the assessee has accounted for all the expenses and none of the expenses have been found to be inflated.
(iv) The.assessment year involved in the case of Telang (supra) is 1990-91 when there was no competition but now there are several persons carrying on this type of business and charging commission at Re. 1 or Re. 1 per thousand. The assessee cannot charge more than this.
(v) Reference is invited to Allahabad High Court decision in CIT v. Ram Narain Heeralal (1997) 227 ITR 401 (All) wherein the court observed that it must be shown that the decision relied upon applies to the facts obtained in a given case and without doing so mere reference of some earlier decision of the Tribunal in certain other matters not pertaining to the assessee was of no consequence and could not have been relied upon. In that case also addition was made on the basis of Tribunal's decision in another case.
3.3 It is, therefore, submitted that the estimate of income at Rs. 5 per thousand is without any basis or material on record. The assessing officer has allowed deduction for expenses at Rs. 1.50 per thousand without any supportive material. The expenses claimed have not been found to be excessive. The assessing officer has made separate additions of Rs. 35,000 for income from other sources. It was submitted before the assessing officer in explanations dated 21-11-2001 and 5-12-2001 that this wqs also part of commission. Separate addition is, therefore, not justified in the facts of the case; it is requested that the income shown may kindly be accepted. This discussion disposes of grounds of appeal Nos. 1 to 5.
4 . . It relates to levy of interest."
5.2 The Commissioner (Appeals), after considering the assessee's written submissions upheld the order of the assessing officer both on account of determination of income from commission and also on the point of addition of Rs. 35,000. The assessee is aggrieved with this order of the Commissioner (Appeals).
6.1 It was in the light of the above facts and circumstances that the learned counsel for the assessee first of all submitted that so far as reliance of the revenue authorities on the decision of Tribunal, Agra Bench in case of C.K. Telang (supra) is concerned, the same is misplaced. According to the learned counsel, though the case of C.K. Telang (supra) was of a businessman carrying on the business of discounting of DDs as is being done by the assessee, but in that case neither the assessing officer nor the Commissioner (Appeals) had dealt with the rate of commission charged by the assessee. According to the learned counsel, the issue in that case was relating to the addition having been made under section 69 of the Income Tax Act. Referring to para 3 of the order of the Tribunal, the learned counsel submitted that in that case the assessing officer had considered the deposits in the bank account of Shri C.K. Telang as unexplained and it was the reason that the peak amount of such deposits in bank account, which came to be Rs. 1,96,629, was considered for arriving at the peak amount of undisclosed deposits in bank and since the opening balance in the bank was at Rs. 75,847 the assessing officer considered the balance amount of Rs. 1,21,282 as unexplained deposit in bank and added the same as deemed income under section 69 of the Income Tax Act. The learned counsel strongly stressing on the aforesaid facts further submitted that so far as assessee's case is concerned, there is no such addition, i.e., the revenue authorities have not disputed the genuineness of deposits in assessee's bank account which are on account of demand drafts brought by various customers from outside Firozabad and discounted by the assessee. Referring to para 5 of the order of the Tribunal (supra) the learned counsel further submitted that the Tribunal was pleased to delete that addition.
6.2 According to the counsel, the only issue in that case before the Tribunal being addition of Rs. 1,21,282 having been made under section 69 of the Act by considering the peak of deposit in the bank account of Shri C.K. Telang as unexplained, the Tribunal had no jurisdiction, after having deleted the addition of Rs. 1,21,282, to deal with the issue relating to the rate of commission charged by the assessee and the findings of the Tribunal, where the Hon'ble Tribunal had proceeded to deal with the rate of commission charged by the assessee, were wholly unwarranted and without jurisdiction. Neither of the parties had brought this issue before the Tribunal. According to the learned counsel, even the assessing officer had not tinkered with the rate of commission claimed to have been charged by that assessee. He time and again submitted that the only issue before the Tribunal was with respect to the addition of Rs. 1,21,282 having been made under section 69 of the Act by considering the peak amount of bank deposits as unexplained. The learned counsel stressed that the findings of the Hon'ble Tribunal in para 6 of its order, where it has directed the assessing officer to determine the assessee's income from commission by applying a rate of 0.5 per cent cannot be said to be a proposition of law and, therefore, are not liable to be followed or liable to be considered as binding on the revenue authorities.
6.3 Coming to the assessee's case, the learned counsel further submitted that the question of estimating one's income by applying a different rate of profit (GP rate or NP rate) or rate of commission or by estimate arises only when the assessee's books of account are rejected, but so far as assessee's case is concerned, though the authorities have observed that the assessee has denied to have maintained the accounts relating to discounting of drafts, but the fact is that assessee having maintained all the details of receipts and expenditure, the books of accounts were deemed to have been maintained and this observation of the authorities is not correct. Drawing my attention to p. 2 of assessee's paper book which is copy of income and expenditure account for the financial year 1999-2000, the learned counsel submitted that from the details appearing in this statement, it is quite evident that the only expenses incurred by the assessee were on account of salary, bank charges, general expenses and conveyance expenses for which there was no necessity of maintaining bulk of books of account. According to the learned counsel, there being only four types of expenses, the same could be maintained in 4 pages and either in the loose form or in binding form, So far as assessee's case is concerned, the learned counsel submitted that the assessee had maintained complete records of draft discounted by it, deposit slips for having deposited the same in assessee's bank account, and so far as expenses are concerned, the salary was paid to only one person, who used to go to bank to deposit the drafts and to bring the cash, whereas bank charges were verifiable from the bank statements. So far as general expenses and conveyance expenses are concerned, the learned counsel submitted that though the assessee had maintained the record of the same yet even if it is assumed that there was no record for these expenses, then the defect was not of such nature so as to authorise the assessing officer to invoke the provisions of section 145(2) of the Act. The learned counsel's plea was that even if it is, assumed that these two types of expenses were not verifiable, what the maximum could be done was to disallow the same which could have resulted in addition of an amount of Rs. 17,729 only. The learned counsel, again referring to the application of rate of 0.35 per cent by the assessing officer, submitted that if the assessing officer was to follow the Tribunal's order then why he did not apply a rate of 0.5.per cent. According to the learned counsel, the application of rate of 0.35 per cent is absolutely arbitrary, on ad hoc basis and, without there being any material to justify application of such rate. In view of the above submissions, the learned counsel pleaded that the income as per assessee's books of account should be accepted.
7. The learned Departmental Representative, on the other hand, has supported the order of the Commissioner (Appeals). Here it is important to mention that the learned Departmental Representative has not countered, the assessee's claim that the observations of the Commissioner (Appeals) relating to non-maintenance of books of account was not correct because the assessee had maintained regular books of account.
8.1 I have considered the rival submissions and facts and circumstances of the case and first of all would like to consider the effect of the order of the Hon'ble Tribunal, Agra Bench, in case of C.K. Telang (supra) which has been relied upon by the revenue authorities, but has been distinguished by the learned counsel for the assessee and for consideration of the same, first of all I would like to reproduce the whole of the order which reads as under
"IN THEINCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA Before Shri N.K. Karhail and Shri Keshaw Prasad ITA No. 4538/Del/1993 Assessment year : 1990-91 Shri C.K. Telang, Hanuman Road, Firozabad.
v.
Assistant CIT, Firozabad.
Appellant by .- Shri A. N. Agarwal, Advocate Respondent1y: Shri M.L. Keral, DR.
ORDERKESHAW PRASAD, A.M. The appeal has been directed by the assessee against the order of the Commissioner (Appeals), dated 27-5-1993, pertaining to assessment year 1990-91.
2. Though, various grounds have been raised, all the grounds relate to the addition of Rs. 1,21,282 as deemed income under section 69 of the Act,
3. Basically, the facts of the case are that the persons from all over the country come to Firozabad to make purchases of glasswares/glass bangles. They bring with them bearer bank drafts in their names in small denominations of Rs. 5,000 or Rs. 10,000 for security reasons. When they come they do not know as to from which seller, they will purchase the goods. They, therefore, approach the assessee, who is carrying on draft discounting activities and the assessee deposits these bank drafts in, his account after these are endorsed in his name. After depositing, the assessee encashes these drafts either the same day or immediately thereafter. The assessee withdraws the money from the bank and disburses it to the persons,, who had brought the bank drafts. For such services, the assessee gets a commission of Re. I per. thousand. The deposits of such bank drafts in assessee's 'account aggregated to Rs. 1,23,12,916. Working out the commission Re. 1 per thousand, the assessee worked out his commission at Rs. :12,300 'and declared the same as ;business income. At the time of assessment proceedings, the modus operandi: was explained to the assessing officer. However, the assessing officer did not accept the contention of the assessee. He held that the peak deposits in the bank account of the ass e'ssee amounted to Rs. 1,96,629 on 3-8-1989. After giving credit for opening deposits of Rs. 75,847, the assessing officer made an addition of Rs. 1,21,282 to the income of the assessee as deemed income under section 69 of the Act.
4. Aggrieved by the order of the assessing officer, the appeal was filed. The Commissioner (Appeals) also confirmed the same. The assessee is in appeal before us against the findings of the Commissioner (Appeals). The learned counsel reiterated the facts as mentioned above. He stated that under section 69 of the Act, primary onus lay on the department to bring on record necessary evidence that the deposits of bank drafts in the bank account are assessee's investment assessable as his income. Reliance was placed on the. decisions reported in CIT v. Smt. P.K. Noorjehan (1980) 123 ITR 3 (Ker), Smt. Panna Devi Chowdhary v. CIT (1994) 208 ITR 849 (Bom), Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) and CIT v. Daya Chand Jain Vaidya (1975) 98 ITR 280 (All). He also argued that the absence of the names and addresses of the purchaser of the outstation drafts did not automatically result in deeming the value of drafts to be the income of the assessee. He, therefore, pleaded that the addition made by Commissioner (Appeals) deserves to be deleted. On the other hand, the learned Departmental Representative supported the order of the Commissioner (Appeals).
5. We have considered the rival submissions. We agree that section 69 of the Act lays down the onus on the revenue to prove that the income added by it represented undisclosed investment by the assessee. Merely because the names and addresses of the purchasers of the outstation drafts was not mentioned, does not automatically lead to a conclusion that the deposits in the bank account of the assessee were the undisclosed investment made by the assessee. As the revenue has failed to prove so, we hold that the provisions of section 69 weret attracted.
6. We agree with the learned counsel that the assessee was engaged in draft discounting business. We have perused the copy of bank statement andfound that almost every day of the year, there have been deposits and withdrawals in the bank account maintained by the assessee.
In other words, almost every day of the month, the assessee has to go to the bank to either make deposits or to make the withdrawals. If somebody goes by the income from the drafts discounting business declared by the assessee, hardly it comes to around Rs. 1,000 per month. In other words, per day income will be around Rs. 50 considering that about 20 days a month, the assessee goes to the bank for such purpose. Rs. 50 was hardly enough to meet even the transportation and other charges. Thus, it is not possible that the assessee will carry on this business merely by charging a commission of Re. 1 per thousand. We have given careful thought to the issue and found that the commission charged by the assessee comes 0. 1 per cent which is inconceivable. We, therefore, hold that the assessee has earned a commission of 0.5 per cent on such draft discounting business. We, therefore, direct the assessing officer to calculate the income from draft discounting business by applying 0.5 per cent commission on the value of drafts deposited in the bank account of the assessee. For this limited purpose, the issue goes back to the file of the assessing officer.
7. In the result, the appeal filed by the assessee is partly allowed.
8.2 A careful analysis of the aforesaid order of the Hon'ble Tribunal leads me to agree with the submissions of the learned counsel for the assessee that the only issue before the Hon'ble Tribunal was with respect to the addition of Rs. 1,21,282 having been made by the assessing officer (and confirmed by the Commissioner (Appeals)J by considering the peak amount of deposits in assessee's bank account as unexplained which was deleted by the Hon'ble Tribunal. So far as question of rate of commission charged by Shri C.K. Telang is concerned, there is nothing in the order which may go to suggest that either the revenue authorities had tinkered with the same or the assessee had taken any such ground and it seems to be due to the reason that when the revenue authorities have not made any other addition, there was no reason for the assessee to raise any ground with respect to the commission. Had there been any addition on account of rate of commission charged by Shri C.K. Telang, the Tribunal would have mentioned the same. Para 2 of the order of the Tribunal clarifies beyond any doubt that all the grounds listed by the assessee were relating to the addition of Rs. 1,21,282 having been made as deemed income under section 69 of the Act, which has become clear from contents of paras 3 and 4 of the order of the Tribunal, had been made by considering the peak amount of deposits in assessee's bank account as unexplained. So far as findings of the Hon'ble Tribunal in para 6 of the concerned order are concerned, I am, without going into the aspect as to whether these findings were without jurisdiction or unwarranted, of the opinion that the same cannot be considered to have laid down any proposition of law and for arriving at this conclusion. I have two reasons, namely, the first reason is that this issue was not before the Tribunal and second issue is that even if the Tribunal was called upon to adjudicate ihis issue, then also the rate of commission charged by the people discounting DDs cannot be a universal rather was dependent on facts of each case meaning thereby that the rate of commission may differ from case to case and upholding the rate of such commission by the Tribunal in the case cannot be a precedent for the other case.
8.3 The findings of the Hon'ble Tribunal in para 6 of the concerned order having been given in the peculiar circumstances of that case as discussed in this para itself, I am of the opinion that the findings based on facts of that case the same could be said to be binding to that case itself. Such issues are decided in each case on the basis of facts in each case which may differ from case to case.
9. Coming to the assessee's case, it is an admitted fact that the facts of the case are quite different from the facts in case of C.K. Telang (supra) which was for consideration before the Hon'ble Tribunal. In case of C.K. Telang (supra) the Hon'ble Tribunal upheld the application of rate of 0.5 per cent for computing the commission income only because of the small turnover. According to the Hon'ble Tribunal, had the assessee charged commission @ Re. 1 per Rs. 1,000, then its daily income would have been only Rs. 50 per day which in the opinion of the Tribunal, was not sufficient for survival of the assessee. But, so far as the present case is concerned, the facts are quite different. In the present case, the assessee's turnover is Rs. 12,17,40,268 on which the assessee himself has declared an income of Rs. 61,067 + Rs. 35,000 as income from other sources. The assessee's case is, therefore, not of such nature where its income may be enhanced on the ground of assessee's survival.
10. Proceeding further, I am of the opinion that though both the authorities have stated that the assessee has not maintained the books of account, this observation, in my opinion, in the peculiar facts relating to the nature of business carried on by the assessee, is not sufficient so as to penalise the assessee by determining its income in an arbitrary manner. From the income and expenditure account, copy of which is placed by the assessee at p. 2 of its paper book, and as has been pleaded by the learned counsel for the assessee, so far as quantum of commission, bank charges and total turnover of DDs discounted by the assessee were concerned, the same were verifiable from assessee's bank account itself because, had there been more turnover or more commission, the amount would remain deposited in the bank, or would have found invested but the revenue authorities have not claimed so. I am, therefore, of the opinion that even if it is taken that the assessee has not maintained the cash book and ledger, which in the opinion of the revenue authorities, were only the types of books to be maintained, then also the transactions relating to business carried on by the assessee were verifiable. Coming to the expenditure part, it is clear from the copy of P&L a/c that the assessee has claimed three types of expenses, namely, salary, general expenses, conveyance expenses. Here also, so far as salary expenses are concerned, the revenue authorities could easily verify the same by examining the assessee's employee which has not been done. The other types of expenses being of general nature and conveyance nature were only to the tune of Rs. 9,875 and Rs. 7,854, respectively and even if it is assumed that the assessee had not incurred any of these expenses, then the addition, at the most, could have been by disallowing these two types of expenses and not to invoke section 145. From the above discussion, what I mean is that the nature of assessee's business and the details maintained by the assessee, even if it is taken that he has not maintained the details in the form of cashbook and ledger, were sufficient to make the assessing officer to deduce the correct income. Simply, on technical grounds, giving a: finding that since the assessee has not maintained the books of accounts its income can be estimated, in my opinion, is not a universally correct approach.
11. In view of the above circumstances, I am of the opinion that the revenue authorities were not justified in rejecting the assessee's accounts, in whatever manner they were maintained and consequently were hot justified to clothe themselves with the jurisdiction for computing the assessee's income by applying an arbitrary net rate of income.
12. Without prejudice to the' above, even otherwise, I am of the opinion that the findings of the Tribunal in case of C.K. Telang (supra) being :not ;with respect to any Proposition of law, the assessing officer was not justified in applying a net rate of 0.35 per cent for computing the assessee's income from commission on discounting of drafts because he has not given any reason for applying such a rate, except by observing that the assessee has not maintained accounts for its business of discounting of DDs. The necessity of keeping of books under the law is to consolidate all the transactions in the compact form, so that the revenue authorities can compute the position of cash or receipts or investments on a particular date which, in the present case, was not possible. None of the revenue authorities has given a finding that from the details maintained by the assessee, it was not possible for them to deduce the correct income so far as the details maintained by the assessee can make one to deduce the correct income, there is no case of non-maintenance of books of account.
13. In view of above facts and circumstances, I am of the opinion that revenue authorities were not justified in rejecting the assessee's version and'applying a net profit rate of 0.35 per cent, and the addition made: on this account, in my opinion is, therefore, liable to be deleted and I delete the same; however, keeping in view that the expenditure on account of "general expenses" and conveyance expenses may be consisting of some expenses of personal nature or may not be supported by proper voucher, I am of, the opinion that disallowance of expenditure of . Rs. 5, 000 from each of these expenses will meet the ends of justice.
14. So far as ground relating to the addition of Rs. 35,000 is concerned, I am of the opinion that the assessee himself having shown this income as income from other sources, the Commissioner (Appeals) was not justified in rejecting the assessee's claim that this income should be considered as have been included in the commission income from the business of discounting of drafts and separate addition should not be made. The order of the Commissioner (Appeals) on this point is confirmed.
15. In the result, the appeal of the assessee is partly allowed.