1976 (8) TMI 36 - HC - Income Tax

Summary

Issues:
1. Consideration of evidence before the Appellate Assistant Commissioner by the Tribunal
2. Ignoring evidence of Daya Shanker and Sundera Devi by the Tribunal

Analysis:
The judgment pertains to a case where the Income-tax Appellate Tribunal, Allahabad Bench, referred questions of law under the Income-tax Act, 1961. The primary issue was whether the Tribunal considered the evidence of Daya Shanker and Sundera Devi recorded by the Appellate Assistant Commissioner in concluding that the assessee failed to prove the source of cash credits in their names. The assessee's counsel argued that the Tribunal's order was flawed due to the non-consideration of this evidence, while the standing counsel for the income-tax department contended that the statements allegedly made by Daya Shanker and Sundera Devi were not available in the record before the Tribunal.

The Tribunal acknowledged that statements of Daya Shanker and Sundera Devi were recorded by the Appellate Assistant Commissioner but were not provided to the Tribunal during the appeal hearing. The Tribunal's order indicated that Sundera Devi had appeared before the Appellate Assistant Commissioner, but the statement made by her was not explicitly included. The Tribunal also noted that Daya Shanker's statement was assumed to have been made before the Appellate Assistant Commissioner. The Tribunal's order highlighted that the Appellate Assistant Commissioner did not specify the source of the funds or address the lack of interest charged on the alleged loans.

The Tribunal's decision was based on the consideration of statements made by Daya Shanker and Sundera Devi before the Income-tax Officer but not those made before the Appellate Assistant Commissioner. The High Court ruled in favor of the assessee, stating that the Tribunal failed to consider the crucial evidence recorded by the Appellate Assistant Commissioner, which was material in supporting the assessee's case. Consequently, the Tribunal's order was deemed flawed due to the non-consideration of this evidence. The High Court did not find it necessary to address the second question raised and concluded the judgment in favor of the assessee.