TaxTMI 
TaxTMI 
TaxTMI 
1998 (4) TMI 172
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....to be noticed before plunging into the provisions of s. 69 of the IT Act and the interpretation of the same. The assessee is an individual. For his failure to file the return of income, notice under s. 148 was issued and on the basis of which the assessee filed Income-tax return showing a loss of Rs. 8,980. There was a search in the case of the assessee on 16th Sept., 1986. In the seized material it was found by the AO that the assessee had deposited a sum of Rs. 70,000 in New Bank of India, Sowcarpet Branch, and two amounts of Rs. 25,000 each were advanced to one Mr. Karimbi on 31st July, 1984. When asked to explain the sources for these investment, the assessee filed confirmation letters from 12 persons having received an amount of Rs. 1,....
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.... s. 69 of the IT Act, 1961. 3. The matter went to the CIT(A), who deleted an addition of Rs. 10,000 in respect of the money advanced by one M. Vijayaraghavan to the assessee in respect of which the assessee recorded a statement on oath on 30th Jan., 1989. Thus, an addition of Rs. 1,10,000 was sustained by the CIT(A) under s. 69 relying on the decision of the Calcutta High Court in the case of C. Kant & Co. vs. CIT (1980) 18 CTR (Cal) 164 : (1980) 126 ITR 63 (Cal). Against the said addition the assessee has come up in appeal before us. The addition of Rs. 1,10,000 consisted of two items of Rs. 8,000 and Rs. 1,02,000. In respect of Rs. 8,000 the assessee's authorised representative was not able to show any source for the investment either be....
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....00 2-5-1984 8. Smt. N. Geetha, 25, Muniappa Street Kondithope Market, Madras-79 Nil 7,000 2-5-1984 9. Naraindas Punjabi 25, Muniappa Mudali, Street, Kondithope Market, Madras-79 Nil 5,000 1-5-1984 10. Mrs. Lakshmi Bai, 42, Venkateswara Nilaya II Floor, PRS Lane, Nagarathpet Cross, Bangalore-2 Nil 8,000 2-5-1984 11. J.V. Sadasivam, 119A, Kallukudalur Road, Vridhachalam South Arcot Nil 10,000 2-5-1984 12. Mrs. Rena Vijayan, 3, Parasa Pillai, Street, Kilapuk, Madras-10 Nil 7,000 2-5-1984 . Total 1,12,000 . The learned counsel for the assessee has submitted that the assessee has filed before the AO the confirmation letters in respect of all the parties, but copies in respect of seven confirmation letters only were file....
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....ved, he has discharged his onus and unless a notice in due form under s. 131 of the Act is issued by the Revenue authority concerned to test the veracity or the genuineness of the transaction or the capacity of the creditor to pay, the assessee has to succeed". He also placed reliance on the decision of the Patna High Court in the case of Jhaverbhai Bihari Lal & Co. vs. CIT (1984) 41 CTR (Pat) 125 : (1985) 154 ITR 591 (Pat), in which it was held : "that the law enjoins the issuance of summons in cases certificates purported to have been granted by the creditors are produced before the assessing authority. The assessee had produced the books of account before the ITO and the books showed the names of the six creditors whose cash credits had ....
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....lso not given. In this regard he relied on the following decisions: (1) CIT vs. M. Ganapathi Mudaliar (1964) 53 ITR 623 (SC); (2) CIT vs. Durga Prasad More (1969) 72 ITR 807 (SC); (3) A. Govindarajulu Mudaliar vs. CIT (1958) 34 ITR 807 (SC); (4) CIT vs. Devi Prasad Vishwanath Prasad (1969) 72 ITR 194 (SC); (5) V. Datchinamurthy & Anr. vs. Asstt. Director of Inspection (Intelligence), IT Dept. & Anr. (1982) 26 CTR (Mad) 106 : (1984) 149 ITR 341 (Mad); (6) CIT vs. Daulat Ram Rawattmull 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC); and (7) Sumati Dayal vs. CIT (1995) 125 CTR (SC) 124 : (1995) 214 ITR 801 (SC). 6. We have considered the rival submissions carefully and perused the material on record. In the present case there was a search ....
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....hese parties. The AO has given opportunity to produce the parties for his examination, but the assessee pleaded his inability, as some of the parties were at Bangalore. Even he has not discharged his burden by producing the parties who were at Madras. From the confirmations, we find that none of the parties is an income-tax assessee and for the source of investment they have a common wording, which reads: "The abovesaid source is from my savings". Nothing is mentioned in the confirmation about the source of income of these parties. Not only this, even the assessee did not bother to ask the AO to issue summons under s. 131 of the IT Act to these parties for which he is required to offer diet money if needed by these parties to the AO because....