TaxTMI 
TaxTMI 
2002 (2) TMI 311
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....bsp; 2,68,532 (c) Squared up accounts 94,000 (d) interest not charged on advances 51,745 5,55,465 3. The above assessment order was set aside by the CIT(A) on all additions, except trading addition of Rs. 87,566, which was sustained. The CIT(A) decided the matter on 6-2-1990. He directed that a fresh opportunity be granted to the assessee to prove its case. The CIT(A) noted that there was litigation going on and that the firm had suffered heavy losses. Wife/mother of partners had also expired and the assessee/partners had faced adverse circumstances. 4. In the second assessment, the following additions were repeated and income was taken at Rs. 4,52,420:- (a) Cash credits ....
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.... issue regarding these creditors was not open before the ITO as specific instructions have been given by the CIT(A) in his order to examine only the issue relating to the creditors in respect of which additions had been made in the first order. While this argument of the appellant does contain some substance, the matter cannot be left at rest over here as the entire issue of fresh creditors was set aside to the file of the ITO who could examine the genuineness of all such creditors. Moreover, as the matter has come up in appeal before me, I can even go into matters which were not considered at the time of assessment and consequentially can include enhancement of income. Hence, I consider it to be entirely justified to again set aside the question relating to all new creditors to the file of the ITO so that the matter can be examined afresh by giving an adequate opportunity to the appellant. The ITO will give the names and addresses wherever available in the books of account of the appellant along with the funds introduced asking for supporting evidence to prove their genuineness. The appellant shall be allowed to inspect the books of account and make copies therefrom so that eviden....
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.... ----------------- Total Rs. 50,000 ----------------- 7. The assessee challenged the addition in appeal but remained unsuccessful. Hence, this appeal. 8. We have heard both the parties in this appeal and with their help have examined material available on record. It is correct that the assessee did not produce ev....
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....new sources of income and the power of enhancement under section 31(3) is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability." 10. We are not for the illegality of the order but are concerned with the situation in which the assessee was placed on account of above directions to prove genuineness of new credits and the matter was remanded for re-examination. The assessee was, thus, placed on racks after more than 10 years. 11. The other adverse circumstances which the assessee had to face during the course of assessment proceedings have been separately noted. The assessee was, thus, asked to prove cash credits more than 10 years after they were introduced in the books of account and squared-up. The assessee was, therefore, made to suffer on account of illegality and irregularity not of assessee's making. The result was long time gap which made the task of proving credits most difficult, if not impossible. The opportunity afforded, cannot thus, be said to be adequate and hearing fair in the circumstances of the case. 12. On examination of squared-up accounts, we find that Rs. 3....