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Issues Involved:
1. Appreciation of evidentiary value of an affidavit in a tax assessment case. 2. Determination of ownership of money-lending business in a firm. Appreciation of Evidentiary Value of Affidavit: The assessee, a registered firm engaged in money-lending business, faced a tax assessment issue where certain pawned ornaments were found during a search u/s 132 of the Income-tax Act, not recorded in the books of account. The ornaments were claimed to belong to one of the partners, Shri Uma Shankar, who had a separate money-lending business. Despite reliance on an affidavit from Shri Uma Shankar, the Income-tax Officer rejected the contentions, deeming them irrelevant and fabricated. The Appellate Assistant Commissioner upheld the addition to the total income of the assessee. The Tribunal, after reviewing the affidavit and statement, concluded that the affidavit lacked credibility, upholding the previous decisions. The High Court found the affidavit to be an afterthought, lacking credibility, and affirmed the Tribunal's decision against the assessee. Ownership of Money-Lending Business: The crux of the issue was whether the money-lending business conducted by Shri Uma Shankar belonged to the assessee-firm. Despite the assessee's attempts to prove that Shri Uma Shankar operated an individual money-lending business, discrepancies between his statement on oath and the subsequent affidavit raised doubts. The authorities, including the Income-tax Officer, the Appellate Assistant Commissioner, and the Tribunal, found inconsistencies and contradictions, leading to the addition of the undisclosed income to the assessee's total income. The High Court concurred with the lower authorities, emphasizing that the affidavit was an attempt to cover up undisclosed income and lacked credibility. Consequently, both questions of law were answered against the assessee and in favor of the Revenue, disposing of the reference accordingly.
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