1988 (2) TMI 49

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.... to produce the bankers either at the original assessment stage or at the reassessment stage ? " The assessee which is a partnership firm is carrying on business in the purchase and sale of piece goods, both in wholesale and retail, with its head office at Madurai. In the course of assessment proceedings for the assessment years 1963-64; 1964-65 and 1965-66, the Income-tax Officer found some credit entries in the books of the assessee in the names of Multani bankers at Madras. The assessee explained that such entries represented loans taken by the firm from those bankers for the purpose of the business. In support of the claim of the assessee, the discharged hundis and vouchers showing payment of interest were produced by the assessee. T....

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....to examine the bankers was not obeyed and the fresh assessment made after remand was vitiated as the Income-tax Officer had taken into account the statements made by the bankers without giving an opportunity to the assessee to cross-examine them. In that view, he directed deletion of the amounts in question. The view of the appellate authority was affirmed on further appeal by the Tribunal. The Department wanted a reference to this court on the question already set out and the Tribunal was directed to forward a statement of the case referring the said question. It is contended by learned counsel for the Revenue that the assessee had not discharged its initial burden of proving that there were loans incurred. It is argued that unless t....