1995 (2) TMI 34

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....Rs. 1,50,000 from the income of the assessee-firm ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that there is no necessity for the assessee to show the source for the deposits ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that in order to bring the entire claim under the provisions of section 69, the Department should prove that the assessee-firm should be capable of earning equivalent amount either in the previous years or having assets worth more than that amount in order to enable the assessee to either sell or pledge them to realise an amount of more than the addition in question ?" The fact....

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....and subsequently renewed for a period of 36 months with effect from March 28, 1981. They pledged their fixed deposits in order to enable the assessee to have an overdraft facility. The Tribunal observed that these persons were identified and they had permanent addresses and that they were also examined by the Income-tax Officer and that their sworn statements were also taken. The assessee filed a letter from the manager of the bank wherein it was stated that the fixed deposits were taken by four persons named therein and that at their request the fixed deposits were paid prematurely and that the proceeds were credited in the overdraft account of the assessee. It is their case that they were repaid the amounts subsequently. The Tribunal obse....

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....ained investments of the assessee." (emphasis supplied). We are also of the view that no referable question of law arises on the Tribunal's reading of section 69 of the Income-tax Act, 1961, as it was in force then. The Tribunal only held that even if the explanation of the assessee was rejected, section 69 conferred only a discretion to the Income-tax Officer to deal with the investments as income of the assessee because the word used was "may" and not "shall" in the said section. The Tribunal finally concluded as follows : " Under the circumstances, we hold firstly that the Revenue was not able to prove that the apparent is not real, that the persons in whose names the fixed deposits stand are only benamidars for the assessee-firm and,....