1977 (12) TMI 47

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..... the Hon ble High Court and by the judgment dt. 1st March, 1974 reported in 100 ITR 159, the High Court upheld the reopening of the assessment. The ITO proceeded with the re-assessment and called upon the assessee to prove the genuineness of the cash credits. The summons issued to the creditors came back unserved and the ITO was of the opinion that the assessee had no further evidence to substantiate the genuineness of the cash credits. He, therefore, completed these assessment by adding the said sum of Rs. 70,000 and interest paid thereon, thus computing the total income at Rs. 94,340. 3. The assessee appealed to the AAC who confirmed the re-assessment on the ground that there was no evidence to show the financial capacity of the credito .....

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..... submitted that in the circumstances the assessee had identified the creditors who had also confirmed the transaction of the loans. Reliance was placed on the decision of the Calcutta Bench of the Tribunal in the case of Biswanath Co. to show that one of the creditors had been accepted as credit worthy which contradicted the claim of the Department that these creditors were mere name lenders. It was submitted that the mere fact that the names of the creditors were found in a list of name lenders maintained by the Department was not sufficient to show that the transaction with the assessee was bogus and, therefore, the Department had not disproved the prima facie case established by the assessee. It was thus argued that the addition should .....

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..... any one of these four transactions of the assessee. Much is made of the fact that summons issued to the creditors came back unserved. But the fact remains that these creditors were income-tax assessees and their file numbers were also supplied by the assessees. In the circumstances, it is obvious that there is no evidence directly contradicting the claims of the assessee that these transactions were genuine loans. The tow facts, namely, that the creditors were known to be name lenders and that the summons were returned unserved may cast some suspicion but are not sufficient to disprove the case of the assessee. We are, therefore, satisfied that the addition of the said amount of Rs. 70,000 by rejecting the explanation of the assessee was n .....

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