TaxTMI 
TaxTMI 
1982 (7) TMI 17
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....5,836 to the income of the appellant in spite of the fact that both the applicants as well as partners of M/s. Ratilal Manekji have filed the affidavits that no interest was receivable or payable ? " The material facts giving rise to this reference briefly are as follows: The assessee is an individual and the assessment year in question is 1973-74. Initially the ITO assessed the income of the assessee for the year at Rs. 737. The Commissioner, however, directed the ITO to make the assessment afresh after taking into consideration the fact that though the assessee had been making investments in a firm, M/s. Ratilal Manekji, and the credit balance at the beginning of the accounting year stood at Rs. 4,04,588, no interest was shown to ha....
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.... but to decide whether it happened or not, which is more a question of fact which must be based on the surrounding circumstances and the test of human probability. Certain facts in this connection assume considerable importance. Firstly, it is important to note that the appellant is the mother of the partners of the debtor-firm. The mother and sons are living together. Though, in the eye of law, the two are different entities, practicality of the situation cannot be lost sight of. Secondly, it is of relevance to note that the interest was charged up to 1972-73 right from 1967-68 in all the years; except for the year in question, the same was again charged in all succeeding years. There should, therefore, be some special reason for not charg....
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.... then took up the matter to the Tribunal. The Tribunal after consideration of the material on record held that the letters alleged to have been exchanged between the firm and the assessee were not genuine. In this view of the matter, the Tribunal dismissed the appeal. Hence at the instance of the assessee, the aforesaid question has been referred to this court. Shri Chitaley, learned counsel for the assessee, contended that the Tribunal could not have come to the conclusion that the letters filed by the assessee were not genuine in the face of the affidavits filed on behalf of the assessee showing that no interest was received by or payable to the assessee. Learned counsel relied on the decisions in Mehta Parikh & Co. v. CIT [1956] 30 IT....
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....ries were called for nor was the presence of the deponents of affidavits considered necessary by either party. The Supreme Court, therefore, held that there was no material whatsoever to justify the finding of the Tribunal. The decision in [1956] 30 ITR 181, cannot be construed to lay down the proposition that unless the deponents are cross examined, the affidavits cannot be rejected. That decision lays down that if there is no material whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross-examination for bringing out the falsity of their statements, then the Tribunal would not be justified in doubting the correctness of the statements made by the d....