A.M.KHANWILKAR, J. - (1.) This appeal takes exception to the final judgment and order dated 21.8.2008 passed by the High Court of Judicature for Raj as than at Jodhpur (for short, "the High Court") in Income Tax Appeal No. 69 of 2006, whereby the appellant's appeal was dismissed and the order of Income Tax Appellate Tribunal, Jodhpur Bench (for short, 'the ITAT) came to be upheld.
(2.) In short, the appellant/assessee was served with a notice under Section 143(2) of the Income Tax Act, 1961 (for short, '1961 Act') by the Assessing Officer (for short, 'Officer') for the assessment year 1998-1999, pursuant to which an assessment order was passed on 30.11.2000. This appeal involves limited challenge to certain addition made under the heads - "Trading Account" and "Credits" in the assessment order. The Officer, inter alia, while relying on the Balance Sheet and the books of account, took note of the credits amounting to Rs. 2,2 6,000/-(Rupees two lakhs twenty-six thousand only). The Officer treated that amount as "Cash credits" under Section 68 of the 1961 Act and added the same in declared income of the assessee (for short, 'second addition'). The Officer then proceeded to compute the income of the assessee for the concerned assessment year. The relevant part of the computation is mentioned below: - "Credits: On examining the balance-sheet and accounts books of assessee, it is apparent that the assessee has shown credit amount of Rs.2,26,000/- in the names of the following 15 persons: ..... ..... ..... Accordingly, sufficient time and opportunity was granted to prove the veracity of credits of Rs. 2,26,000/- as shown by assessee. However false/wrong particulars or explanation were submitted with respect to credits shown by assessee. In this manner, the credits of Rs.2,26,000/- shown in the name of 15 persons, is not correct and any correct proof/evidence has not been produced by assessee with respect to income of creditors and source of income. Besides this, the credits of Rs. 2,26,000/- as shown in the name of 15 persons is held as unexplained under Section 68 and added in declared income of assessee. Accordingly, the computation of income of assessee for assessment year 1998-99 is as follows: JUDGEMENT_28_LAWS(SC)4_2020_1.html Assessment was made. Necessary forms were issued. Notice be issued separately for imposition of penalty under Section 272(1)(c)."
(3.) Aggrieved, the appellant/assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Jodhpur (for short, 'CIT(A)'). The appeal was partly allowed vide order dated 9.1.2003. However, as regards the Trading Account and Credits in question, the CIT(A) upheld the assessment order.;