TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 433
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....on of Rs. 22,23,643/- made as unexplained case brought in to make payments and ignoring the facts that Dr. Gaur Hari Singhania, who is one of the partners of the firm, had failed to establish that he refund the amount which were initially found to be short during the course of survey U/s. 133-A of the Income Tax Act, 1961? 2. Whether in law and in circumstances of the case the I.T.A.T. was justified in arriving at the opinion that A.L.V. of the property namely Ganga Kutir should be adopted at Rs. 20,000/-? 3. Whether the Appellate Tribunal was justified in accepting oral evidence of the assessee and submission as against material evidence in the form of books of account relied on by the I.T.O. and thereby place a burden of proof on the I.T.O. in respect of facts, which were in the special knowledge of the assessee?" Following questions at the instance of the assessee were re-framed by the Tribunal, which are as follows:- "1. Whether on facts and in the circumstances of the case the Hon'ble Income Tax Tribunal was legally correct in holding that the interest paid to partners not in the capacity of partners but in various other capacities as a depositor in the firm amounting to R....
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....t. Sri Upadhyay submitted that question no.1 itself contains a challenge to the finding of the Tribunal on the said issue. Before we proceed to consider the submissions it is necessary to look into the facts. The facts have been noted in the order of Tribunal which need no repetition except few facts which may be necessary for deciding the issue raised. The assessee is engaged in a Banking business, which has several partners including Dr. Gaur Hari Singahina. On 15th April, 1977 a survey was conducted at the office of the assessee. It was found that in the book the balance recorded as on 15.04.1977 was Rs. 31,47,146.56 whereas on physical verification, the cash on survey was only Rs.5,92,264.87/-. There was shortage of a cash amounting to Rs. 25,54,880.89. The cashier Sri Bajrang Lal Ojha, was examined on the same day. In paragraph 3 of the order of the Tribunal, the following facts are noted :- "With regard to the shortage, the Income-tax Officer conducted the survey, examined Shri Bajrang Lal Ojha, the Cashier of the Firm. He stated that the money to the extent of Rs. 25,54,880.89/- had been taken away by three partners of the assessee firm as under:- 1. Sri (Dr.) Gaur Hari ....
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....agraph 12 of his order, he has observed as under:- "It is also not a case of advance to the partner for expenses of the firm because the money is not appearing in the 'Uchant account' or the suspense account maintained by the firm. This is also an admitted position." The Income-tax Officer has no doubt stated in the same paragraph the statement of the Cashier that the money in question was taken away by Dr. Singhania is equally not beyond doubt because it does not appear any where in the books of account of the firm. However, he makes a contradictory statement in paragraph 16 of his order when he states, "It may be pointed out, the said statement of Dr. Singhania (on 15.4.77) was on the spur of the moment and has the necessary credibility." If the Income-tax officer was prepared to accept the credibility of the statement of Dr. Singhania given on 15-4-1977 for a particular purpose, we do not understand why the same credibility could not be given to the entire statement and similarly to the statement of the Cashier also recorded on the same day at the time of the survey. In our opinion, the statements of both the parties deserve credibility as they were recorded on the spur of t....
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.... away by Dr. Singhania. Suffice it to say that if there is any missing link, it is for him to explain in his own assessment. So far as the assessee is concerned, it is sufficient to hold that he took away the money and returned it. The assessee cannot, therefore, be held guilty of any unexplained cash in his hands so as to attract the provisions of Section 69-A of the Act. The assesssee has offered satisfactory explanation for the receipt of the money. That explanation is that it had received the money from Dr. Singhania. Dr. Singhania is after all not a man of street. Admittedly he is a man of considerable means and, therefore, it can be said that the burden which lay on the assesseee to explain the receipt of the money has been duly discharged. If the Department is of the view that the assessee had not actually advanced or given any money to Dr. Singhania and further that it had also not not received any such money from him but it had met the expenses out of some other undisclosed source of income, then it is for the Department to lead evidence in this regard and establish its case. 17. We, therefore, hold that the assessee has explained the source of the money of Rs. 25,00,000/....
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....rse, in the sense that it is such as could not reasonably have been arrived at on the material placed before the Tribunal. In the absence of such a question having been claimed, the High Court was obliged to accept the findings of fact arrived at by the Tribunal and then proceed to decide the question of law referred to it." The question No.1 as referred and quoted above, does not specially challenge the findings recorded by the Tribunal that amount was refunded by Dr. Gaur Hari Singhania. Sri Upadhyay has submitted that the challenge to findings be assumed in the question. He submits that when the question has been framed that Dr. Gaur Hari Singhania has failed to establish that he has refunded the amount, the challenge to the finding is implicit. A plain reading of the question does not support the above contention. However, even if it is assumed that the question contains a challenge to the finding of the Tribunal, it is sufficient to say that the findings recorded by the Tribunal are based on the material and oral statement of Dr. Gaur Hari Singhania and this Court, while deciding the reference, shall not sit in appeal against the said findings. We are, thus, of the clear opi....