1996 (6) TMI 103 - AT - Income Tax

Assessing Officer, Assessment Proceedings, Assessment Year, House Property, Income From Undisclosed Sources, Income Tax Proceedings, Prima Facie Case

Summary

Issues:
1. Addition of Rs. 20,000 under section 69 of the Income-tax Act for loans obtained from close relations.
2. Rejection of loans as income from undisclosed sources due to lack of confirmations.
3. Upholding of addition by DCIT (Appeals) for failure to appear personally and lack of evidence.
4. Dispute over admissibility of photocopies as evidence in income-tax proceedings.
5. Burden of proof on genuineness of loans and capacity of creditors.
6. Application of principles from the case of CIT v. Durga Prasad More on reliability of evidence.
7. Assessment of evidence presented by the assessee and the duty of the Assessing Officer to investigate before drawing adverse inferences.

Analysis:

The appeal pertains to the assessment year 1989-90 challenging the addition of Rs. 20,000 under section 69 of the Income-tax Act for loans claimed to be obtained from close relations and invested in a house property. The Assessing Officer rejected the loans as income from undisclosed sources due to the absence of confirmations. The DCIT (Appeals) upheld the addition citing lack of personal appearance by the assessee and insufficient evidence. The appellant contended that loans were supported by documentary evidence, which was unjustly rejected. The issue revolved around the admissibility of photocopies as evidence in income-tax proceedings, with the appellant arguing that the loans were reasonably proved through certified copies. The Revenue insisted on the onus of proving the genuineness of the loans and the creditors' capacity, referencing the case of CIT v. Durga Prasad More for principles on evidence reliability.

The Tribunal considered the evidence presented, noting that the loans from the husband, mother, and father were supported by documents such as bank statements and certificates. It emphasized that the strict rules of evidence act do not apply to income-tax proceedings, and photocopies certified by the assessee are acceptable. The Tribunal highlighted the Assessing Officer's duty to investigate and disprove the case set up by the assessee rather than placing an extraordinary onus on the assessee. It referenced the need for a quasi-judicial approach by revenue authorities to ensure fairness and reasonableness in decision-making. The Tribunal concluded that the DCIT (Appeals) should have accepted the evidence provided by the assessee, and without proper inquiry or investigation, could not shift the burden entirely on the assessee. Ultimately, the Tribunal accepted the loan amounts and directed the deletion of the addition.

In summary, the Tribunal allowed the appeal of the assessee, emphasizing the importance of a fair and reasonable approach by revenue authorities, the duty to investigate before drawing adverse inferences, and the acceptance of certified photocopies as evidence in income-tax proceedings.