9911796707
|
Home
Issues Involved:
1. Justifiability of the addition of Rs. 80,374 as assessee's income from other sources. 2. Refusal to summon persons mentioned u/s 131 of the Income-tax Act, 1961, and its impact on the addition of cash credits. Summary: Issue 1: Justifiability of the Addition of Rs. 80,374 as Assessee's Income from Other Sources The Tribunal originally referred the question: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in law in upholding an addition of Rs. 80,374 as assessee's income from other sources?" The assessee, a partnership firm, had credits totaling Rs. 1,05,000 plus interest of Rs. 3,201 in its books for the assessment year 1968-69. The credits were in the names of eight parties, six from Nepal and two from Purnia, allegedly received as advances for biri leaves. The ITO found the certificates of confirmation suspicious and asked the assessee to prove the signatures. The assessee requested the ITO to issue summons u/s 131, which the ITO refused, citing jurisdictional limitations. The ITO taxed the sum as income from undisclosed sources. The AAC and the Tribunal upheld the addition, with the Tribunal allowing a set-off for intangible additions in the biri leaves/tobacco account. Issue 2: Refusal to Summon Persons Mentioned u/s 131 and Its Impact on the Addition of Cash Credits The supplementary question referred was: "Whether, on the facts and in the circumstances of the case, the refusal to summon the persons mentioned in the petition u/s 131 of the Income-tax Act, 1961, vitiated an addition of cash credit amounting to Rs. 80,374 to the assessee's income as income from other sources?" The Tribunal noted that the assessee had consistently pressed for summoning the parties u/s 131, and the refusal to do so meant the onus on the Department was not discharged. The Tribunal was aware of the legal implications and the necessity of issuing summons to verify the creditors' identities. The court held that the refusal to issue summons vitiated the addition of Rs. 80,354. The Tribunal was directed to instruct the ITO to issue notices to the six creditors and finalize the assessment based on their responses. Conclusion The court concluded that the refusal to summon the persons u/s 131 vitiated the addition of Rs. 80,354. The Tribunal was directed to ensure the ITO issues notices to the creditors and finalizes the assessment accordingly. No order as to costs was made.
|
