1985 (8) TMI 28

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....d loans of Rs. 10,000 each from Shrimati Bimla Devi and Shrimati Geeta Devi. When called upon to explain the cash credits, the assessee asserted that these were monies of the two ladies and in respect of which they had made declarations under section 24 of the Finance (No. 2) Act, 1965, under which they had paid income-tax of Rs. 750 each. The stand of the assessee was supported by confirmatory letters sent by the two ladies. The Income-tax Officer did not accept the version of the assessee. He did not accept that they were genuine deposits of the two ladies, as they had never been assessed to income-tax. He, therefore, after rejecting the stand of the assessee, treated these sums aggregating to Rs. 20,000 as income of the assessee from "ot....

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....s of the case, the Tribunal was justified in confirming the order of the Appellate Assistant Commissioner deleting the addition of Rs. 20,000 made by the Income-tax Officer." Mr. Rajgarhia, learned senior standing counsel, submitted that the Appellate Assistant Commissioner and the Tribunal erred in law in deleting the sum of Rs. 20,000 treating them as genuine investments of the two ladies. It was submitted that the two ladies were none other than the wives of the two partners. Mr. Rajgarhia contended that the decision of the Tribunal was in the teeth of two decisions of the Supreme Court, namely, Jamna Prasad Kanhaiyalal v. CIT [1981] 130 ITR 244 ; ITO v. Rattan Lal [1984] 145 ITR 183. It was submitted on behalf of the Revenue that a v....

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.... bound to treat the sums disclosed as their separate property. That submission was upheld and the Supreme Court held that the fact that disclosures had been accepted and assessments made did not preclude the Revenue while assessing the third party to test the correctness of the sources of credits. In the case of ITO v. Rattan Lal [1984] 145 ITR 183 (SC), the Supreme Court followed the decision of Jamna Prasad Kanhaiyalal [1981] 130 ITR 244. The Situation in the instant case is the reverse. In this case, the Appellate Assistant Commissioner as well as the Tribunal had found that the deposits belonged to the two ladies. That is finding of fact. This court in a reference under section 256(1) of the Act is not empowered to challenge the finding....