Pinaki Chandra Ghose, J. - (1.) THIS appeal was admitted on the following substantial questions of law: (i) Whether the Tribunal was justified in law in upholding the addition of Rs. 50 lacs made on the basis of materials seized from a third party, the veracity and genuineness of which was not established by summoning and examining the parties concerned in spite of the appellant's specific request and its purported findings in that behalf are arbitrary, unreasonable and perverse ? (ii) Whether the Tribunal was justified in law in holding that the appellant was required to produce the concerned persons for examination and that the AO had no obligation/duty in that behalf or to prove the genuineness and veracity of the materials seized from a third party on which the Department was seeking to rely ? (iii) Whether and in any event, the Tribunal was justified in law in reversing the finding of the CIT(A) that the said sum of Rs. 50 lacs could, if at all, form subject -matter of assessment only in the hands of the then chief executive of the appellant D.R. Khatau, since neither the appellant nor the Special Officer appointed by this Hon'ble Court had received the said amount and its purported findings in that behalf are arbitrary, unreasonable and perverse?
(2.) THE facts of the case briefly are as follows. The company, the assessee was incorporated in the year 1931 and carried on business of running a textile mill. The manufacturing operations at the said mill was stopped on 21st Jan., 1984 due to the financial difficulties. It appears from the facts that the assessee had borrowed money from Industrial Reconstruction Bank of India (hereinafter referred to as 'the Central Bank'). The said bank initiated the proceedings before the Hon'ble Court for recovery of their dues on 29th May, 1985. A Special Officer was appointed by the Court for sale of the movable and immovable properties of the assessee' farm. The purpose of the said farm to settle the liabilities of the creditors including the workers. On 23rd Dec, 1988, an order was passed by the Court in Matter No. 847 of 1985 [Industrial Reconstruction Bank of India v. Bangodaya Cotton Mills Ltd.) whereby the Court directed the sale of the movable assets of the assessee including the plant, machinery, factory shed etc. on a consideration of Rs. 1 crore to M/s Prasad Steel Traders, a proprietary concern of one Sunil Kumar Jaiswal. It would be evident from the said order dt. 23rd Dec, 1988 that the movable assets of the assessee were valued by an approved valuer and the sale thereof was directed by the Special Officer at the value determined by the approved valuer. Payment of the consideration was to be made by the purchaser to the Special Officer and directions were given to the Special Officer as to how each payment received from the purchaser was to be disbursed. Two workers' unions, namely, Bangodaya Cotton Mills Employees' Union and Bangodaya Cotton Mills Workmen's Union agreed to accept an aggregate sum of Rs. 50 lacs in full and final settlement of all their dues and claims.
(3.) IT is also submitted that an appeal was preferred from the said order dt. 23rd Dec, 1988 and the said appeal and application were disposed of by the Hon'ble Division Bench on 14th March, 1989. It was provided in the order of the Hon'ble Division Bench that if the workers' dues exceeded Rs. 50 lacs, the sum would be met from the sale proceeds of the immovable properties of the assessee.;