- (1.) THE appellant has approached this Court by way of filing the present appeals against a common order dt. 24th Feb., 2004 passed by the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred as 'the Tribunal') in ITA Nos. 173/Asr/1996 and 274/Asr/1998 for the asst. yrs. 1991 -92 and 1989 -90, raising the following substantial questions of law. For convenience, the facts are being taken from the order pertaining to the asst. yr. 1991 -92. (i) Whether, in the facts and circumstances of the case and the evidence placed on record, the finding that Sh. Surinder Kumar had no identifiable source of income out of which he could advance the loan of Rs. 50,000 is sustainable in law? (ii) Whether, in the facts and circumstances of the case, the provisions of Section 68 of IT Act, 1961 be invoked and it be held that the loans advanced by Surinder Kumar of Rs. 50,000 each in the relevant assessment years is to be treated as the income of the appellant ?
(2.) THE assessee in the present case is engaged in the business of commission agent and sale/purchase of pesticides and fertilizers. During the year, the assessee introduced a sum of Rs. 50,000 in the name of Sh. Surinder Kumar son of Sh. Suraj Bhan, resident of Bishanpura, Tehsil Abohar as a deposit. On consideration of the explanation offered by the assessee for the above referred cash credit, it was found as a fact by the AO that the alleged creditor was not in a capacity to deposit the loan with the assessee -firm and it was in fact an entry arranged by the assessee himself and routed through Sh. Surinder Kumar. It was further found that a sum of Rs. 50,000 was deposited in cash in the saving banks account of Sh. Surinder Kumar on 3rd Aug., 1990 and on the same day the cheque of the same amount was issued by Sh. Surinder Kumar in favour of the assessee. Keeping this fact in view, the amount of Rs. 50,000 shown as credit in the account of Sh. Surinder Kumar was treated as unexplained and addition to that effect was made under Section 68 of the IT Act, 1961 (hereinafter referred as 'the Act'). Having failed even before the CIT(A), the assessee approached the Tribunal. The Tribunal while considering various pleas raised by the assessee came to the conclusion that Sh. Surinder Kumar neither had the capacity nor identifiable source to advance loan of Rs. 50,000 to the assessee. The order of CIT(A) was upheld by the Tribunal. It is against this order that the appellant is in appeal before this Court. The relevant para of the order of the Tribunal is reproduced as hereunder: 7. After hearing both the sides and considering the material on record, it is seen that the amount of Rs. 50,000 was deposited by Shri Madan Lal, accountant of the assessee -firm in the bank account of Shri Rajinder Kumar and after the deposit, the cheque was issued in the favour of assessee. It is not disputed that cheque was prepared by Shri Madan Lal and signature of Shri Surinder Kumar was obtained on the cheque issued to the assessee. It is also seen that Shri Dharam Pal, manager and brother (sic) of the assessee -firm has admitted that the bank account of Shri Surinder Kumar was opened on his introduction and the amount of Rs. 50,000 was deposited in the bank by Shri Dharam Pal, accountant of the assessee -firm and the cheque in favour of assessee -firm was also obtained by Shri Dharam Pal/Madan Lal. On examination of the documents furnished before the AO, it was found that Shri Surinder Kumar was obtaining account with M/s Sohan Lal Sethi and Sons, M/s Sheetal Trading Co. and M/s Sohan Lal Nathu Ram Sethi, none of which were having sufficient deposits and no amount was withdrawn to explain the source of deposit of Rs. 50,000. Moreover, the AO has also been able to establish that Shri Surinder Kumar was also not having the capacity to deposit Rs. 50,000 in his savings bank account out of which the cheque was issued in favour of the ' assessee as Shri Surinder Kumar has admitted to have spent Rs. 3 lakhs in construction of house. Though the AO has estimated that the at higher amount (sic) and has also taken the amount of Rs. 80,000 from the Bank of India for purchase of tractor out of which Rs. 10,000 was still outstanding at the time of the assessment. Since no fresh material or evidence has been adduced to prove that Shri Surinder Kumar has capacity or identifiable source to advance loan of Rs. 50,000 to the assesses, therefore, in our considered view the action of the learned CIT(A) in confirming the addition of Rs. 50,000 is justified and calls for no interference as the assessee has miserably failed to prove the creditworthiness of the creditor or definite source by adducing the necessary evidence. While upholding the action of the learned CIT(A), we dismiss the ground Nos. 1 to 3 of the assessee's appeal for the asst. yr. 1991 -92.
(3.) WE have heard Shri Avneesh Jhingan, advocate appearing for the appellant and with his assistance have gone through the orders passed by the authorities carefully.;