KAMAL KUMAR SAHARIA Vs. COMMISSIONER OF INCOME TAX
LAWS(GAU)-1994-2-3
HIGH COURT OF GAUHATI
Decided on February 04,1994

KAMAL KUMAR SAHARIA Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents


Cited Judgements :-

MADNANI CONSTRUCTION CORPORATION (P) LTD. VS. COMMISSIONER OF INCOME TAX [LAWS(GAU)-2006-12-68] [REFERRED TO]
DHANRAJ MILLS (P.) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX [LAWS(IT)-2014-10-14] [REFERRED TO]
PAVAN PRAKASH VS. COMMISSIONER OF INCOME-TAX (CENTRAL) [LAWS(PAT)-2016-1-138] [REFERRED TO]


JUDGEMENT

M.K.SHARMA, J. - (1.)IN this reference at the instance of the assessee, the following question has been referred by the Tribunal under S. 256(1) of the INCOME TAX ACT, 1961, for the opinion of this Court for the asst. year 1982 - 83 :
"Has not the learned Tribunal committed an error on solely basing its judgment on book adjustment entries made on 31st March, 1982 after the close of the previous year to find out the financial position of that year, when the payments were actually and really made on or after 2nd April, 1982 on the encashment of the cheque as found by the lower appellate authority and thereby confirming the addition of Rs. 3,43,014 without any corroborative evidence in the hands of the Department that the payments were made on or before 31st March, 1982 ?"

(2.)THE facts in this case are that the Assessing Officer (AO) added to the income of the assessee a sum of Rs. 3,43,014 "being the amount of cash brought into the books of the assessee as received from the executive engineer by cheque on 31st March, 1982" within the previous year 1981 -82 corresponding to the asst. year 1982 -83, while the cheque was encashed only on 2nd April, 1982. He came to the conclusion that since the assessee had to incur expenses (as shown in his books) aggregating to Rs. 3,28,554, he brought in the amount of Rs. 3,43,014, in the "guise of the cheque" and added the amount as income from undisclosed sources.
The assessee's contention that the payments for the expenses though paid, encashment of the cheque on 2nd April, 1982, on different dates but recorded on 31st March, 1982, as the cheque which was encashed actually on 2nd April, 1982, was recorded on 31st March, 1982, as all the receipts and expenses relate to the accounting year 1981 -82, though received or paid after the accounting year as per its method of accounting regularly employed, was not accepted. The assessee being aggrieved went before the CIT(A) who held that the addition of Rs. 3,43,014 was not justified and, therefore, deleted the same. In coming to the above decision, the CIT(A) relied on the vouchers produced for some of the expenses and also the method of accounting regularly employed by the assessee and the totality of the aforesaid circumstances was considered acceptable by him. He also reproduced in his appellate order, the order of assessment to show that the assessee, in his cash book, has not shown any cash received on 31st March, 1982. It was recorded that "a cheque was received for Rs. 3,16,000 on 31st March, 1982". He has also referred to the evidence produced on behalf of the assessee to show that the expenses actually incurred on 8th Dec., 1981 and 6th Feb., 1982 were recorded on 31st March, 1982.

(3.)THE Revenue filed an appeal against the order of the CIT(A) before the Tribunal who reversed the order of the CIT(A) and restored the order of the AO in respect of the addition of Rs. 3,43,014 as income from undisclosed sources. In coming to the finding, the Tribunal relied upon the book entries of the assessee as the only acceptable evidence and held that no other subsidiary evidence such as vouchers, etc., could be relied upon. The Tribunal had not gone into the question of the method of accounting regularly employed by the assessee.


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