Rastogi, J.

1. THE assessee, M/s. Sterling Machine Tools, Agra, was a partnership firm consisting of 4 partners including Sri Satish Chandra. The assessee carried on business of manufacture and sale of centering machines and also purchase and sale of spare parts for the assessment year 1965-66. For the previous year ended December 15, 1964, the assessee filed a return showing an income of Rs. 34,148-43 on sales of Rs. 1,86,000. The ITO made the assessment on August 5, 1966, and computed the total income at Rs. 37,218. During the previous year relevant to the assessment year 1966-67, the assessee carried on the same business and during the course of assessment for that year, on enquiry from the Vigilance Bureau and the Boards of Experts, the ITO found that the actual cost of a centering machine came to Rs. 7,331, whereas the assessee claimed the same at Rs. 9,432. When Satish Chandra, partner, was confronted with that report he gave a note in writing on May 15, 1968, to the ITO stating that though his cost was much more, yet in view of the opinion of the experts he was willing to his income being worked out on that basis. Because of the aforesaid report of the Board of Exper