Dipak Kumar Sen, J. - (1.) This reference arises out of the income-tax assessment of Premier Suppliers (P.) Ltd., the assessee in the assessment year 1965-66, for which the corresponding previous year ended on the 3rd November, 1964.
(2.) The ITO found that a sum of Rs. 25,000 was credited in the books of the assessee in the account of one Sureka Jute Company and issued summons to the latter to adduce evidence and produce its books and the other documents to prove the source of this credit. By a letter dated the 17th December, 1968, Sureka Jute Company informed the ITO that its books of accounts had been seized and retained by the income-tax department. Thereupon, the ITO called upon the assessee to prove that the loan was a genuine one. The assessee produced one Bidyanand Sureka, the sole proprietor of the Sureka Jute Company, who deposed before the ITO, inter alia, that he was a partner of the firm, Daluram Gaganmall, since 1964 and had advanced money to the assessee in the past. The books of accounts of the firm were in possession of the ITO, Sp. Circle IV. He did not remember the dates of the transactions nor the amounts advanced nor could he produce the bank accounts which it was stated were also with the ITO, Sp. Circle IV. He admitted that some transactions of the firm, Daluram Gaganmall, were bogus. From a list prepared by the ITO of transactions relating to the period S. Y. 2014-15 to S. Y. 2017-18 he indicated the transactions which were bogus. He, however, stated that the transactions with the assessee so far as he remembered were genuine and that the name of the assessee did not appear in that list. The ITO held that the assessee had not proved the source of the cash credit and it was not possible to ascertain the same. Accordingly, he added the amount of credit to the income of the assessee and brought it to tax.
(3.) Being aggrieved, the assessee preferred an appeal before the AAC, It was contended that the proprietor of Sureka Jute Company had confirmed the loan by his oral evidence, that the interest in respect thereof had been paid by cheques and, therefore, the loan had been sufficiently proved. The AAC did not accept the contentions of the assessee and confirmed the assessment.;