D.K.Seth, J. - (1.) The question of law that has been raised by Mr. Khaitan in this appeal is that despite the explanation in terms of Section 68 was furnished by disclosing the list of subscribers along with the particulars of the permanent income-tax account number, wherever available, and the numbers of shares allotted and the face value of the shares, the AO added the share capital as undisclosed income of the assessee without arriving at any conclusion as to the question whether the explanation was satisfactory or not.
(2.) Mr. Khaitan submits that this was done by the AO on the ground that no documents were furnished by the assessee despite opportunity being given. The CIT(A) affirmed the said order of the AO on the same ground. The details of the documentary evidence were not furnished. The Tribunal affirmed the order of the CIT(A) and the AO on two-fold reasons : (1) that the paper book that was filed did not bear any certificate that the documents included in the paper book are corrected copies of the records before the AO, and (2) that the statement of facts and the ground of appeal were not signed. 1. According to Mr. Khaitan, this was an infraction of the principle laid down in the decision in Hindustan Tea Trading Co. Ltd. v. CIT and CIT v. Kundan Investment Ltd. Inasmuch as it was incumbent on the AO, if any explanation was submitted, to record his observation as to the satisfactory nature of the explanation before adding the share capital as undisclosed income. The CIT(A) ought to have noticed whether this explanation was on record or not without proceeding with the surmises that this was not on record. The Tribunal ought not to have proceeded on purely technicalities.
(3.) Mr. Dutt, on the other hand, contends that no explanation was ever submitted before the AO. As such, there was no scope for infraction of the principle laid down in those two decisions on which he relied upon to contend that the power of the AO under Section 68 is absolute where no explanation is submitted. In the present case, no explanation having been submitted there was no infraction of the principle laid down in the said decision and as such, the appeal should be dismissed.;