TaxTMI 
TaxTMI 
1954 (11) TMI 43
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..... The partners of the firm are Messrs. Babulal and Niranjanlal. It was registered under section 26A of the Income-tax Act, the registration taking effect from the assessment year 1946-47. On total sales of Rs. 5,79,143 the assessee showed a profit of Rs. 24,191 that is below 4% which was regarded as extremely low. The Income-tax Officer after scrutinising the ledger accounts of various parties in the books of the assessee felt doubtful about the genuineness of certain deposits in the personal account of persons staying in Marwad. As these deposits formed an important factor in the matter of the present assessment he called for the assessee to show that the deposits were actually received from the creditors in whose names they appeared in th....
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....eness of the above deposits the assessee relied on the following: (i) affidavits filed before the Income-tax Officer, (ii) the deposits were received by cheques or drafts on banks in British India and the same were repaid by cheques or drafts and (iii) interest on these was also stated to have been paid by cheques or drafts. The Income-tax Officer was of the opinion that the letters by creditors Sawitribai, Sitabai, Setib and Bhimraj Duggad were not genuine although affidavits were filed in support of the deposits by Ramgopal Kejriwal, Savitribai and Sitabai. The Income-tax Officer felt doubtful about the genuineness of the loans and directed Babulal that unless the deponents came forward and were prepared to be cross-examined in respect....
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....non-residents carry on business at Fatehpur and if the petitioner was serious in the matter he could have easily called them or produced the account books of those persons for examination before the Income-tax Officer. He failed to do so. The burden of proving the nature of the cash credits in doubtful accounts lies with the petitioner and not on the department. Previous records also go to show that substantial amounts were credited in the names of the ladies from Fatehpur in the account books of Seth Bachhraj Amolakchand and these deposits were made through Babulal and were also withdrawn through him when he left the firm on Dewali 1944 and the amounts were credited in the account books of the petitioner. It is, therefore, clear that the p....
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....pear to be fictitious. The question that arises for our consideration is whether on the evidence on record it was legitimate to draw an inference that these amounts represented undisclosed profits of the firm. 8. It was contended on behalf of the applicant that the depositors could not be compelled by the Income-tax Officer to appear before him for giving evidence as they resided at a distance of more than 200 miles from Nagpur, and as the assessee had offered to examine them on commission the Income-tax Officer could not have refused to issue a commission for their examination. A grievance of this refusal was made to the Appellate Assistant Commissioner of Income-tax, but he did not pass any order. It is, therefore, contended that as th....
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....uch a commission for their examination when the assessee applied for it. The appellate order passed by the Appellate Assistant Commissioner of Income-tax, Nagpur, shows that a grievance, that the request for commission was not granted, was made before him in appeal. The Appellate Assistant Commissioner made a grievance of the fact that the assessee did not produce the accounts of the non-resident depositors to prove the loans. This grievance of the Appellate Assistant Commissioner is unreasonable when no opportunity was given to the assessee to examine these persons on commission. 11. The same grievance appears to have been repeated before the Appellate Tribunal who called upon the assessee to produce the drafts of two major depositors s....