B.P.JEEVAN REDDY, C. J. - (1.) IN this application filed by the assessee under section 256(2) of the INcome-tax Act, 1961, the following questions of law are sought to be raised : "(1) Whether the finding of the INcome-tax Appellate Tribunal that the applicant has singularly failed to establish the genuineness of the identity of INdian Wool Traders is wholly unsustainable in law, as the said finding is perverse and unreasonable, being contrary relevant material available on record, namely, the settlement application filed by one Shri Suresh Kumar before the INcome-tax Settlement Commission, and also, the certificate from the New Bank of INdia, Rani Bagh Branch, New Delhi confirming that a draft issued by the applicant had been credited to a bank account standing in the name of INdian Wool Traders ? (2) Whether, the finding of the INcome-tax Appellate Tribunal that INdian Wool Traders was a "facade" is likewise wholly unsustainable in law, being unreasonable and perverse, and contrary to the aforesaid relevant material available on recordi ? (3) Whether the INcome-tax Appellate Tribunal was correct in law in examining only part of the settlement application filed by one Shri Suresh Kumar, and it was also undisputed that the said settlement application had been filed by Shri Suresh Kumar vis-a-vis his involvement with the business carried on under the name and style of INdian Wool Traders ? (4) Whether the findings recorded as above by the INcome-tax Appellate Tribunal are thus vitiated as being arrived at in disregard of relevant material available on record, thereby rendering such findings wholly unsustainable in law more particularly copy of account of INdian Wool Traders as appearing in the books of Golden Yarn Trading Co. ? (5) IN view of the above, and even otherwise, whether the INcome-tax Appellate Tribunal was justified in law in holding that investment in the goods claimed to belong to INdian Wool Traders remain unexplained in the hands of the instant applicant, thereby calling for an addition of Rs. 5,03,500 ? (6) Whether the INcome-tax Appellate Tribunal was correct in law in recording the further alternative finding that the provisions of section 40A(3) of the Act would also be attracted vis-a-vis the aforesaid payments, even though there was no such finding by the INcome-tax Officer and the applicant had at no stage been called upon to establish as to how the payments could be saved from application of the provisions of that section ?"
(2.) QUESTIONS 1 to 5, in effect, pertain only to one issue namely, whether Indian Wool Traders is a genuine concern. The petitioner claimed to have made certain payments to the said entity mostly in cash, some by way of bearer cheques and one payment by way of a crossed cheque. The Income-tax Officer felt a doubt as to the genuineness of the said concern and called upon the assessee to establish its identity and genuineness. It was found by the Income-tax Officer that even the crossed cheque issued in the name of the said concern was really encashed by the partner of the assessee-firm. On a consideration of the material before him, the Income-tax Officer held that it was not a genuine or existing entity. Accordingly, he disallowed the said payments. On appeal, the Appellate Assistant Commissioner agreed with the Income-tax Officer. The assessee wanted to adduce some additional evidence which was not allowed by the Appellate Assistant Commissioner. On further appeal, the Tribunal did allow the assessee to adduce additional evidence. It considered the entire material under a very elaborate order. The Tribunal dealt with each and every circumstance appearing for and against the assessee and concluded that the said concern is neither genuine nor is its identity established. The ultimate finding of the Tribunal is that "Indian Wool Traders was only a convenient facade." It is contended by learned counsel for the petitioner-assessee that where a payment is made by a crossed cheque, it is itself a proof positive of the genuineness and identity of the recipient. We cannot accept or recognise any such rule of law. Whether a particular entity or concern is a genuine and existing entity/concern or merely a bogus name, is a question of fact and it cannot be reduced to a rule of law. Here, all the three authorities have held against the assessee and we see no reason to disturb the said finding of fact. Accordingly, questions No. 1 to 5 cannot be directed to be stated. So far as question No. 6 is concerned, it is really academic in view of the finding as to the genuineness of the said entity. This is also the view taken by the Tribunal in the application filed under section 256(1) of the Act. The application is, accordingly, dismissed. ;