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Issues:
Assessment of undisclosed income, validity of entry in account books, consideration of facts by Tribunal, application for reference to High Court. Analysis: The case involved an application under s. 256(2) of the Income-tax Act, 1961, regarding the assessment of undisclosed income for the year 1964-65. The Income Tax Officer (ITO) added Rs. 36,000 as income from undisclosed sources based on an entry in the account books. The assessee firm contended that the entry was bogus, explaining it as an error made by the accountant without complete information. The Appellate Authority accepted the explanation, but the Tribunal, after examining the account books, concluded that the entry was genuine. The assessee then sought rectification, which was rejected, leading to the application for reference to the High Court. The main contention was whether the Tribunal adequately considered all relevant facts in determining the genuineness of the entry. The assessee argued that the Tribunal failed to consider crucial evidence, making it a question of law suitable for reference. However, the Revenue contended that the issue was factual, as the Tribunal had examined the relevant evidence. Both parties referenced a Supreme Court case to support their arguments. Upon reviewing the orders of the Appellate Authority and the Tribunal, it was found that the assessee failed to present crucial evidence before the Tribunal to support its claim that the entry was bogus. The explanations provided by the assessee regarding cash balance and counterbalancing entries were not effectively communicated during the Tribunal's examination of the account books. The Tribunal's decision was based on the available evidence, and the assessee's lack of participation hindered the consideration of all relevant facts. Ultimately, the Court rejected the reference application under s. 256(2) of the Act, stating that the Tribunal had adequately considered the facts available to it. The Court emphasized that the assessee's failure to present crucial evidence during the Tribunal proceedings prevented a proper assessment of the entry's genuineness. The burden of proof rested on the assessee, and the Court found no grounds to suggest that the Tribunal had overlooked any significant facts in its decision-making process.
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