COMMISSIONER OF INCOME TAX Vs. L HADIBANDHU
HIGH COURT OF ORISSA
COMMISSIONER OF INCOME TAX
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R.N.MISRA, J. -
(1.) THIS is an application by the Revenue under s.256(2) of the IT Act of 1961 for a direction to the Appellate Bench of the I.T. Tribunal, Cuttack to state a case and refer the following two questions
said to be of law for opinion of the Court.
"(1) Whether in the facts and circumstances of the case, the Tribunal was justified in deleting the cash credit relying on bare argument of the assessee's counsel devoid of any supporting materials on record for the same?" (2) Whether in the facts and circumstances of the case, there was any material to show that the cash credit was out of business income of the assessee and whether the conclusion of the Tribunal is legally tenable?"
(2.) ASSESSEE is an individual. The year of assessment is 1962 -63 ending with the previous financial year on 31st March, 1962. The ITO found that the assessee had introduced cash in his books of
accounts of various dates and had withdrawn cash from the business book in a similar manner.
Though assessee carried on business in bus plying, foreign liquor, molasses; cinema exhibition
etc., he maintained accounts only in respect of plying of bus, foreign liquor and molasses. At the
instance of the ITO, assessee drew up a central cash book indicating the amounts introduced and
withdrawn by him and from the said central cash book. It transpired that assessee had excess cash
introductions. The ITO discarded the return and did not accept the losses shown by the assessee
and computed the total income at Rs. 94,880/ - wherein included a sum of Rs. 58,899/ - as income
from other sources. Assessee failed in first appeal, but before the Tribunal, assessee reiterated his
stand that out of the additions made during the year, the introduction in question was coverable.
The Tribunal observed thus: -
"We wanted the Department Representative to go through the so called 'central cash book' and verify the contention of Sri Anjaneyulu and the case was adjourned for this very purpose to 11th February 1975. When the case came up for hearing on this date, Sri G.B. Chand stated that he was not in a position to contradict the contention of the assessee that the cash introduction was spread over throughout the year in small amounts for both the year under consideration. We have carefully considered contentions of both the parties and have gone through the facts on record. We find that the cash introductions came in small amounts and were spread over throughout the year. This crucial fact, in our opinion leads to the irresistible inference that they were nothing but the undisclosed profits deducted and assessed by the Income tax Officer in this very year. It must be remembered that the assessee was the sole proprietor of several different businesses. He maintained accounts some units and did not maintain accounts for others. It was also stated before us that the assessee did not maintain any accounts at all prior to the A.Y. 1960 - 61 and it was for the first time on 1st April, 1959 that the assessee opened a cash book with an opening balance of Rs. 15,000/ -. Admittedly, the assessee was withdrawing cash from the business books and also introducing therein almost every other day throughout the year. The position would have been different if the cash introduction had occured in the beginning of the previous year in which case it may not be possible to draw an inference that it came out of the profits earned in the future months of the year. But, this is not so in this case. Even the peak amounts in both assessment years were reached towards the end of the previous year under consideration. Hence, we hold that the unexplained cash introduction should, in all fairness, have been set off against the additions made to the trading accounts during the same assessment years."
Learned Standing Counsel for the Revenue has contended that there was no adequate material before the Tribunal for the conclusion and the Tribunal should not, therefore, have accepted the
plea of the assessee which had been negatived by the ITO Learned Standing Counsel probably is
justified in contending that more material should have been placed by the Tribunal in its appellate
order to support the conclusion. We, however, find that there has been additions in the year which
sufficiently covers up the total introduction of cash during the year. As a fact, the Tribunal has
found on the concession of the Department Representative before it that the introduction was in
small amounts spread over the year and the bulk of the introduction related to a period towards
the close of the year. Once such a position is not disputed, the finding, in our view, seems to be
one of fact not open to challenge merely on the basis that the Tribunal had failed to give further
details in its order. Essentially the dispute is one of fact and no question of law can be said to arise
out of it.
(3.) THE application must accordingly fail and is rejected. We make no order as to costs.;
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