Sabyasachi Mukharji, J. - (1.) These appeals by special leave arise from the decision of the Orissa High Court dated 31st October 1973 refusing to direct the Tribunal to state a case under S. 256(2) of the Indian Income Tax Act, 1961 (hereinafter called the Act) and to refer certain questions said to be questions of law arising out of appellate order of the Income-tax Appellate Tribunal for determination of the High Court. The assessment year involved was 1962-63. There were proceedings - one appeal was related to an assessment order whereby additions were made to the quantum of income disclosed by the assessee and the other was in respect of imposition of penalty under S. 271(1)(c) read with S. 274(2) of the said Act.
(2.) The questions involved respectively in two applications before the High Court were as follows: "S. J. C. No. 116 of 1972 1. Whether in the absence of proving confirmation letters and Hundis by the assessee, the assessee has discharged his initial onus by producing merely the confirmation letters and Hundis to prove the nature of the transaction 2. Whether in the facts and circumstances of the case the Tribunal was right in ordering deletion of Rs. 1, 50,000/- as assessee's income from undisclosed sources 3. Whether in the facts and circumstances of the case the cash credit is the assessee's income from undisclosed sources S. J. C. No. 85 of 1972 Whether in the facts and circumstances of the case the Tribunal was right in shifting the onus from the assessee to the Revenue and in deleting the penalty -
(3.) The assessee at the relevant time was a private limited company and maintained accounts according to the calendar year. For the accounting year ending on 31st December, 1961 corresponding to the assessment year 1962-63, the Income-tax Officer did not accept the assessee's accounts showing cash credit of Rs. 1,50,000/-. Three amounts were shown to have been received by way of loans from three individual creditors of Calcutta under Hundis. The assessee produced before the Income-tax Officer letters of confirmation, the discharged Hundis and particulars of the different creditors general index numbers were with the Income-tax Department. Attempts had been made to bring those creditors before the Income-tax Officer by issue of notices under S. 131 of the Act, but the said notices were returned with the endorsement 'left'. The Income-tax Officer, therefore, treated the entire amount of Rs. 1,50,000/- as unproved cash credit and added the same to the income of the assessee. The appeal of the assessee to the Assistant Appellate Commissioner was dismissed. Thereafter there was further appeal to the Tribunal.;