AI Drafter 
TaxTMI 
TaxTMI 
1979 (4) TMI 172
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....om other sources ?" 3. In the aforesaid two assessment years cash credits to the extent of Rs. 90,000 and 91,000 respectively were shown in the books of the assessee. The details whereof may be stated. 1962-63 Rs. (1) Gajanand Agarwal 10,000 on 13th Sept., 61 10,000 on 20th June, 63 20,000 (2) Pushker Lal Agarwal 10,000 on 29th Sept., 61 (3) Smt. Sita Devi 10,000 on 11th Oct., 60 20,000 (4) Smt. Jamuni Devi 20th Dec., 60 25,000 20th Dec., 60 25,000 90,000 "1963-64 (1) Smt. Rukmini Devi 9th April, 62 31,000 (2) Smt. Sarda Devi 7th May, 62 30,000 (3) Pushar Lal Agarwal 10th Nov., 61 10,000 (4) Smt. Jamuni Devi 6th Aug., 62 5,000 (5) Smt. Sita Devi 5,000 (6) Gajanand Agarwal on 10th Nov., 61 10,000 91,000 The assessee was called upon to explain the nature and sources of these deposits. The ITO, the AAC, as also the Tribunal after examining the materials adduced have come to the conclusion that the cash credits could not....
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.... facts and circumstances of each case whether the addition to the income of the assessee on account of cash credit found in his account books is justified or not. If, however, the explanation of the assessee has been found to have been rejected on some surmises or conjectures then it has become a question of law as to whether the finding recorded by the Tribunal or the Departmental authorities is binding in a reference case. It has also been held that if the finding is recorded upon no evidence or is so perverse that any reasonable body or person could not have taken that view then also the finding is not binding on the High Court. If the money was found to have been deposited by the partners in the books of account of their partnership firm and if the fact of deposit was believed then the mere failure of the partners to explain from where they got the money did not justify the addition of the amount of cash crediting the firm's income." The difference brought about by the introduction of s. 68 of the Act has also been noticed in the aforesaid decision. What the legal position is, even after introduction of s. 68, is clear from the following observations :' "if the as....
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....the credits could not be said to be genuine credits for the following reasons:' (i) Gajanand claims to have started the business with the capital of 5,000/- rupees and has shown 100 per cent return on his capital in the first year itself, namely, 1957-58 which can not be accepted. (ii) Returns have been filed by Gajanand for five years, namely, 1955-56 to 1961-62 on one date i.e., 17th Sept., 1962, very close to the date of the credits as shown in the books of accounts of the assessee. (iii) The register that had been produced before the ITO was very similar in size and colour to the registers produced in case of the other creditors, which showed that it was the assessee and not the alleged creditors who had got the registers prepared. In order to show that Gajanand had enough capital to advance the loan personal expenses has been shown to be Rs. 500 to 600 per annum. This was impossible to accept. In view of these circumstances the ITO came to the conclusion that Gajanand was not in a position to advance the sums claimed by him to the assessee. The AAC has, apart, from the reasons aforesaid mentioned that the appellants, statement made before him was that he was do....
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....e of acceptance. It would also appear from the order of the ITO that P. L. Agrawal was carrying on business even after the alleged advances. It follows that during the entire period from 1957-58 onward the capital initially employed was locked up in the business itself. Taking all these into consideration it cannot be said that any error or law was committed by the taxing authorities concerned in arriving at the conclusion to which they have arrived at in relation to the case regarding advance made by Pushker Lal Agrawal. 9. Case of Sita Devi and Jamuni Devi are also similar. nether of the two ladies appeared before the ITO in compliance to the summons under s. 131 of the IT Act, Affidavits were, however, sworn to explain the cash-credits. The affidavits have not been accepted for the following reasons:' (i) There was no evidence to prove that they had saved the amount claimed by them and they were available to them to be invested with assessee. (ii) That income-tax return for 5 years were filed on the same date i.e., 10th Sept., 1963. At the time of assessment neither accounts nor details of pawn brokering or money lending business were produced. It was thus not possi....
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.... no evidence to show that she was carrying on pawn brokering business. The other reasons which have been advanced by the ITO are only circumstances which may be taken into consideration provided that basic reasoning is correct. The learned counsel for the assessee pointed out that the material adduced before the ITO definitely showed that Rukmani Devi was carrying on independent business. He referred to the assessment order for the year 1958-59 (page 40 of the brief) wherein it is observed as follows: "On the basis of local enquiry it was learnt that the assessee was in the habit of giving small amounts of loan against pledges or ornaments and house hold utensils and has been deriving taxable income therefrom." The learned counsel contended that the authorities have made a wrong assumption in thinking that there was no material to show that Rukmani Devi was carrying on brokering business. The contention appears to be correct. The assessment order is based on the basis of a local enquiry made by the ITO or one of the Officers of the Department. This order could be relied upon to show that Rukmani Devi was, in fact, carrying on business. In the absence of any cogent material to....