1991 (5) TMI 44 - HC - Income Tax

Summary

Issues:
1. Failure to provide an opportunity for cross-examination of a witness.
2. Dismissal of appeal based on stamped receipts and affidavit.
3. Lack of confirmation of statements during assessment.
4. Treatment of sum as unexplained income under section 68 of the Income-tax Act.
5. Failure to discharge the burden of proof under section 68.
6. Determination of the genuineness of a cash credit entry.

Analysis:

Issue 1: The court addressed the failure to provide an opportunity for cross-examination of Rao Bikram Singh. The Tribunal did not set aside the assessment for the purpose of allowing cross-examination, leading to a question of law regarding the justification of this decision.

Issue 2: The appeal was dismissed despite the submission of stamped receipts and an affidavit. The Tribunal's decision raised a legal question on the correctness of dismissing the appeal based on this evidence.

Issue 3: The Tribunal's decision on the lack of confirmation of statements during assessment was challenged. The court analyzed whether the Tribunal was legally justified in holding that confirmation was not provided by the assessee, raising a question of law.

Issue 4: The Tribunal treated a sum of Rs. 15,000 as unexplained income under section 68 of the Income-tax Act. The court examined the legality of this treatment and whether the sum could be considered assessable under section 68.

Issue 5: The court assessed whether the assessee failed to discharge the burden of proof under section 68. The issue revolved around the onus placed on the assessee to prove the genuineness of the cash credit entry and the entitlement to the right of cross-examination.

Issue 6: The genuineness of a cash credit entry of Rs. 15,000 deposited in cash was scrutinized. The court analyzed whether the Tribunal had sufficient material to determine the entry's genuineness and whether it could be deemed undisclosed income of the assessee.

The court dismissed the application under section 256 of the Income-tax Act, emphasizing that the genuineness of cash credit entries is a question of fact, not law. Citing precedents, the court concluded that the determination of the genuineness of such entries falls within the realm of factual findings, not legal questions warranting reference to the High Court. The burden of proof rested on the assessee to explain the cash credits, and the court found no grounds for reference based on the factual nature of the issue.