Decided on July 07,1975



Pathak, C.J. - (1.) THIS is an application under Section 256(2) of the Income-tax Act, 1961, hereinafter referred to as "the Act".
(2.) THE Commissioner of Income-tax has filed this application, which arises out of the judgment and order of the Income-tax Appellate Tribunal, Gauhati Bench, dated December 7, 1972, in I.T.A. No. 163 of 1970-71. The assessee is a registered firm running a flour mill. The Income-tax Officer on examination of the books of account of the assessee found a sum of Rs. 25,000, credited on September 13, 1962, to the account of Khubrarn Mansing of 36, Ezra Street, Calcutta. The assessee was asked to prove that the credit in favour of M/s. Khubram Mansing was genuine. No evidence was produced except an undated receipt from the party which purported to state that the sum in question was advanced by the creditor and received back by it. The Income-tax Officer rejected that explanation and stated that he had evidence that the loan standing in the creditor's name was not genuine. Accordingly, the Income-tax Officer included the sum of Rs. 25,000 as income of the assessee under the head "Other sources" and made the assessment. The assessee preferred an appeal before the Appellate Assistant Commissioner who upheld the addition. The Income-tax Officer during the assessment proceeding initiated penalty proceeding under Section 271(1)(c) of the Act and the matter was referred to the Inspecting Assistant Commissioner. After hearing the parties the Inspecting Assistant Commissioner came to the conclusion that the assessee had concealed its income in the shape of Rs. 25,000 and had shown it as a bogus credit. He, therefore, levied a penalty of Rs. 20,000, by his order dated February 24, 1970.
(3.) THE assessee filed appeals before the Income-tax Appellate Tribunal both against the order of the Appellate Assistant Commissioner confirming the addition of Rs. 25,000, as well as the order of the Inspecting Assistant Commissioner levying a penalty of Rs. 20,000. Both the appeals were heard together and by a common order the Tribunal held that the assessee had failed to prove that the credit was genuine. That it was the duty of the assessee to establish that the credit was genuine and the assessee having failed therein, the Tribunal was of the opinion that the onus of proving the genuineness of the credit was not discharged by the assessee and, therefore, the assessment by adding a sum of Rs. 25,000 was upheld. Regarding the penalty, the Tribunal found that the department has not been able to establish that the assessee had concealed the income. THE Tribunal further observed that merely because the explanation given by the assessee was not acceptable and the evidence given by it was not enough to prove the genuineness of the credit, it could not be held that a case of concealment was made out. THE Tribunal also found that there was no evidence led by the department to prove that the assessee had concealed its income. On an application under Section 256(1) of the Act, the Tribunal observed that since the order was passed on the facts that there was no material to prove the concealment from the side of the department, the matter was clearly decided as a question of fact and no question of law arose. Thus, the Tribunal declined to refer the proposed question of law. Hence, the present petition.;

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