F.C. RUSTAGI, J.M. only dispute raised by Revenue in this appeal is in respect of action of CIT(A) who ordered deletion of Rs. 97,221 made by ITO on account of unaccounted sales or adulteration in liquor sales and payment of penalty outside books of accounts and overcharging of sales of liquor. assessment year involved is 1979-80 and assessee during this period was deriving income from country liquor from vends situated at Kharar Landran Road, Kharar Mondi, Kahlon etc. During course of assessment proceedings ITO observed that penalty amount of Rs. 15,000 which was levied on assessee by Excise & Taxation Deptt. was nowhere reflected in books of accounts on one hand, secondly, assessee was found to have committed three offences by Excise & Taxation Deptt., that of adulteration by mixing water in liquor, overcharging and opening their vends on dry days for which ultimately penalties were levied. ITO on all these accounts, finding GP rate disclosed to be low, made addition of Rs. 97,221 as detailed in his assessment order at length. said addition was comprised of Rs. 33,792 on account of unaccounted sales or adulterated liquor sales, Rs. 15,000 paid on account of penalty outside books and Rs. 48,429 for overcharging on sale of liquor. When matter came before CIT(A) he deleted said addition in entirety for reasons given by him in his order. It is said action which is disputed by Revenue. learned departmental representative submitted that assessee stands punished by Excise & Taxation Department for all three offences and various explanations have been given. On other hand, it is submitted that one charge is levied by any Department and this should be enough to warrant addition and CIT(A) just ordered deletion of addition in entirety. ld. counsel for assessee besides relying on order of CIT(A) submitted undoubtedly charge of overcharging stands established against assessee but no other charge is there regarding penalty. He submitted that whatever default is done, it is done by ahatawalas' and karindas' and it is they who paid penalty. He submitted that rate disclosed under all circumstances is fair and should have been accepted. After taking into consideration rival submissions and going thoroughly through record we are of view that entire addition should not have been deleted by CIT(A). faults are admitted by assessee himself and very strange explanation is given by them. From assessee's letter dt. 24th March, 1982 written to ITO it is mentioned therein that business was done by Karindas and any extra charge is not even known to assessee. It is also mentioned that penalty amount was recovered from 'Karindas' and 'Ahatawala' and was paid to government. very strange thing which is found in said letter is self-explanatory which reads as under: "The addition of water in sales effected at Ahata and also by open sale at Ahata, assessee-firm was able to cover up by loss and necessary profits have already been incorporated in books of account of firm. Therefore, conversion of bottles, pints and nips into proof liters clearly shows that assessee-firm sold 2112 bottles more and sale proceeds of same have also been included. It was this modus operandi and hence overcharging of assessee could convert straight loss into profit of Rs. 40,500 as returned." Then we are not repeating facts much in detail because same are well detailed in orders of two lower authorities but there is no dispute that assessee was tried for three offences i.e. of adulteration, overcharging and opening of vends on dry days. very detailed explanation or sort of written submission was placed before CIT(A) in which assessee said lot about t h e i r honest and fair dealings with customers and check of Excise Department on sale rate etc. In said letter they have said that even overcharging is not found to exist in actual practice. When we peruse order of authorities, we find that penalties are undoubtedly reduced but charges are established, may be in respect of opening on dry days, it can be called as technical but overcharging is established and also accepted by ld. counsel for assessee before us. We are unable to appreciate submission of assessee that whatever irregularities were there they were committed by "Karindas" and they alone were responsible for same and if there was any amount they should have pocketed it. DETC levied penalty of Rs. 1,000 for overcharging of 50 paise by "Karinda" on said of nip on 21st Sept., 1978. In this regard, submission of ld. counsel for assessee was that no customer will give more than prescribed rate. In this connection it was submitted that they came to know of penalty only when they got demand notice and they collected same from "Karindas" is just mentioned to be rejected. We are unable to appreciate contention of assessee that they are not parties to same. In course of arguments, they had relied on our earlier decision in allied concern but there though we had sustained some addition for possible leakage, there were no official or Court orders regarding levy of penalty. Therefore, said judgment cannot come to rescue of assessee and then even there in said judgment we had sustained addition in small amount. Regarding penalty of Rs. 8,000, ultimately Rs. 5,000 penalty was levied but it does not exonerate assessee. On same basis of facts that amount of Rs. 15,000 was not reflected in assessee's books on one hand and overcharging is not only established by Court orders but even admitted before us by learned counsel for assessee on their behalf, opening of vend on dry day may be technical and may result in more income but it shows that assessee believes in disobeying law. Any how, GP rate disclosed with all these discrepancies in background should not have been accepted and looking to extent of total business, submissions of learned departmental representative was that total addition of Rs. 97,000 and odd may look heavier but it is on basis of fraction per bottle. Anyway, we are of view that addition is warranted but not in heavy amount of Rs. 97,000. Over- charging on sale of liquor since stands established addition on that account at Rs. 48,429 which is rightly worked out by ITO and that of Rs. 15,000 paid on account of penalty outside books, also cannot be disputed. Regarding addition of Rs. 33,792 which is on account of unaccounted sales or adulterated liquor sales, it seems to be only matter of estimate. Under circumstances, we are of view that addition in instant case is called for but if it is pitched at Rs. 75,000 instead of Rs. 97,221, it will be just and fair. order of CIT(A) is, therefore, reversed to extent that addition of Rs. 75,000 is to be adopted instead of Rs. 97,221 made by ITO. In support of our finding we have relied on admission of assessee, orders of Excise & Taxation Deptt. and entire reasoning given by ITO in his order which stands duly approved and confirmed by us except in respect of addition which we have pitched at Rs. 75,000 (Seventy five thousand only). We have only reduced amount of addition because in respect of adulteration and sales outside books, there cannot be anything but estimate. Under circumstances, addition of Rs. 75,000 is sustained. In result, revenue's appeal is partly allowed. *** INCOME TAX OFFICER v. IQBAL SINGH TARANJIT SINGH