Chandrachud, J. - (1.) The assessee-firm, M/s. Radha Kishan Nandlal, which is respondent to this appeal consists of three partners. Subhkaran Jhunjhunwalla having an 8-anna share and two others having each a 4- anna share therein. In the course of the assessment for the years 1950-51 and 1951-52 the Income-tax Officer found that another firm, M/s. Radhakissen Nandlal Arhatwalla, was a branch of the assesses firm. Accordingly, he included the income of that firm in the hands of the assessee-firm for those Years.
(2.) During the assessment proceedings for the year 1952-53 the year under reference, the Income-tax Officer on the basis of the nest records intended to include the income of the branch firm in the income of the assessee-firm, The account books of the branch firm were not produced by the assessee-firm on the ground that the business was closed and therefore the books were not easily available. But Subhkaran Jhunjhunwalla had returned an income of Rs. 55,416 as his share in the profits of the branch firm on the basis that he had a one-anna share therein, The Income-tax Officer estimated the income of the branch firm at sixteen times the income which was returned by Subhkaran Jhunjhunwalla. Deducting a sum of Rs. 40.000 for expenses inclusive of payments made to the working partners of the branch firm, the Income-tax Officer added back a sum of Rs, 8.60.000 to the assessee-firm's income for the relevant year. The order of assessment was confirmed in appeal by the Appellate Assistant Commissioner.
(3.) On further appeal, the Tribunal examined Subhkaran Jhunjhunwalla in order to determine the income of the branch firm. Jhunjhunwalla stated in his evidence that the sum of Rs. 55,416 which was shown by him as his share in the income of the branch firm was really the entire profit earned by that firm. Evidently the Tribunal disbelieved this but it held that Jhunihunwalla had an 8-anna share in the income of the branch firm. The income of the branch firm was on that basis estimated by the Tribunal at Rs. 1,10,000 odd. Deducting therefrom a sum of Rs. 25,000 for expenses inclusive of amounts payable to the working partners, the Tribunal held that the total income of the branch firm which could be included in the assessee's income would come to a sum of Rs. 75,000 only.;