JUDGMENT

SHAH J.-In their return of income for the assessment year 1951-52 the respondents, Messrs. K. Y. Pilliah & Sons, declared Rs. 18,679 as their income from business. The Income-tax Officer discovered that in the business of purchasing and selling cloth carried on by the assessees the gross profits from the turnover disclosed by them worked out at 3.8% while in the case of other merchants carrying on similar business in the same locality it worked out at 6 to 7%, that the relevant vouchers for purchases by the assessees of goods were not produced, and that in respect of those transactions, besides the entries in the books of account, there was no evidence of actual payment of credit purchases. The Income-tax Officer was, therefore, of the view that the " purchases remained unproved ". Thereafter, he made detailed enquiries and found that the assessees had been selling cloth in the name of Bhuvaneswariah, son of K. Y. Pilliah, principal partner of the assessees, and in the name of Veerabhadrappa, their accountant. These sales were also not entered in the books of account. The explanation of the assessees that these were " accommodation sales to oblige weavers", in respect of wh