I.S.ISRANI J. - (1.) THIS is a reference application under S. 256(2) of the IT Act. 1961 (hereinafter referred to as " the Act "), arising out of the order of the Tribunal, Jaipur Bench, Jaipur, in I.T.A. No. 239/JP/1983 dated July 16, 1984, in respect of the asst. year 1979 -80.
(2.) THE reference application preferred by the petitioner under S. 256(1) of the Act was rejected by the learned Tribunal, vide its order dated November 21, 1984. Hence, this application.
(3.) THE petitioner is a partnership firm carrying on the business of jewellery.It maintains the account books on the mercantile system which have been produced before the tax authorities from time to time. The income -tax assessments for various assessment years including the year in question have been made on the basis of profit and loss account, balancesheet and other records maintained and produced before the tax authorities. It is stated that in the course of its business, the petitioner firm received a sum of Rs. 15,000 by cash on October 21, 1978, as loan from Shri Santosh Kumar Sethi, residing at 26, Station Road, Giridih (Bihar), who is said to be a native resident of Rajasthan and a person known to the partners of the assessee -firm and not a relative of any of the partners of the assessee -firm. On receipt of the amount, the impugned amount was credited by the petitioner firm to the account of Santosh Kumar Sethi in its books of accounts which are regularly and properly maintained from day to day. The amount was received on October 21, 1978, and the accounting year of the petitioner firm ends on Diwali which was to fall on October 30, 1978, therefore, no interest was credited to the account of the depositor in the relevant assessment. For the succeeding year, interest was credited. A copy of the account of the depositor as existing in the books of account of the petitioner firm has been reproduced in the application. It has been further stated that interest on the deposit amount was credited for the asst. yrs. 1980 -81, 1981 -82, 1982 -83 and 1983 -84 at Rs. 1,800, 1,800, 1,800 and Rs. 950, respectively. The tax was also deducted at source. The depositor was paid a sum of Rs. 3,240 by cheque dated November 28,1981, on Canara Bank. A sum of Rs. 16,755 remained payable at the close of the accounting year relevant to the asst. year 1983 -84. In the course of assessment proceedings, the petitioner firm was required to prove the deposit of Rs. 15,000 by Shri Santosh Kumar Sethi on October 21, 1978. A confirmation was filed in which it was stated that the depositor had applied for permanent account number which is annexure -A. The depositor also admitted the deposit and sent a copy of the (sic) asst. year 1979 -80. Independent verification was made by the ITO, Giridih. A copy of the letter of the depositor to the ITO, Jaipur, along with the copy of the assessment order has been marked as annexure -B. However, the ITO, Jaipur, was of the view that as the confirmation was unattested, signed by one Shri Santosh Kumar Sethi in Hindi and the reply given, vide letter dated December 21, 1981, in English by S. K. Jain and another letter dated January 22, 1982, was not signed by Shri S. K. Jain and there being no affidavit of the depositor, his identity had not been proved. He, accordingly, treated this amount of Rs. 15,000 as unexplained and assessed it as income from undisclosed sources in the hands of the petitioner firm, vide the assessment order dated January 30, 1982. Being aggrieved, an appeal was preferred before the CIT (Appeals), Rajasthan, Jaipur, who confirmed the addition and rejected the claim of the petitioner, vide his order dated January 21, 1983. The petitioner thereafter preferred a second appeal before the Tribunal, Jaipur. The Tribunal, though it accepted that Santosh Kumar is the same person who is shown as S. K. Sethi in the petitioner's account books, from the facts and material on record including the assessment order of the creditor, held that it was difficult to hold that the assessee has discharged the onus on it to prove the creditworthiness of the said creditor, More so when it is doubtful. Learned Tribunal, therefore, sustained the addition and dismissed the appeal of the petitioner. A reference application under S. 256(1) of the Act was filed formulating 8 questions of law as arising out of the order of the Tribunal with a request that the same may be referred to the High Court for its opinion. This application was dismissed by the learned Tribunal, vide its order dated November 21, 1984.;