9911796707
TMI Blog1989 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the credits as genuine, on the basis of the confirmatory letters filed by the assessee. However, a survey conducted subsequently showed that many of the creditors are not available at the addresses given and the summons served to them had returned unserved by the postal authorities. In the circumstances, the Commissioner was of the opinion that the credits shown by the assessee in the names of the various parties are not genuine. He therefore, issued a notice to the assessee to show cause why the assessment should not be properly revised or modified for considering the genuineness of the cash credits appearing in the names of the above 24 parties, in accordance with the provisions of section 68 of the Income-tax Act, 1961. In reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the genuineness of the credits appearing in the books of the assessee. Aggrieved with the above order of the Commissioner, the assessee is in appeal before us. 3. Shri Seetharaman, the learned representative for the assessee contends that the Commissioner could not have taken into account the results of survey made by the department after completion of the assessment in order to pass the order under section 263. It is submitted that any material obtained after the assessment cannot form part of the " record " as envisaged in section 263 and it cannot be taken into consideration for the purpose of invoking the provisions of section 263, in view of the decision in the case of Ganga Properties v. ITO [1979] 118 ITR 447 (Cal.). It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the record. Since it is found in the course of the survey that most of the creditors were non-existing persons at the given addresses, all the 24 credits appear to be spurious, and the Commissioner is perfectly justified in invoking the provision of section 263. It is pointed out that any assessment made by the ITO without making proper and necessary enquiries, which ought to have been made, will be an order erroneous and prejudicial to the interests of the Revenue. Reliance in this connection was placed on the following decisions : 1. Madras High Court's decision in the case of Indian Textiles v. CIT [1986] 157 ITR 112, 2. Patna High Court's decision in the case of CIT v. Pushpa Devi [1987] 164 ITR 639, 3. Delhi High Court's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditors were non existing persons inasmuch as, the summons addressed to them could not be served by the postal department since no such persons existed at the given addresses. This clearly showed that the substantial credits of Rs. 10,90,687 are not genuine and the action of the ITO in accepting the cash credits without examination regarding the genuineness of the credits is erroneous and prejudicial to the interests of the Revenue. 7. The Delhi High Court in the case of Gee Vee Enterprises held that the Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the ITO should have made further enquiries before accepting the statements made by the assessee in his return. The reason is obvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s High Court in the case of Indian Textiles held that where the ITO had given relief without any proper verification and such an order being an order prejudicial to the Revenue, it could properly form the subject-matter of revision, under section 263. 10. In the case before us when the assessee had claimed huge sum of Rs. 10,90,687 as borrowings made from certain creditors, the action of the ITO in not making enquiries in order to find out the genuineness of these credits, is certainly erroneous and prejudicial to the interests of the Revenue, especially in the light of the further facts brought on record during the course of survey, which showed that the creditors are not available at the addresses given by the assessee. 11. The claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early lays down that the word ' record ' shall be deemed always to have included, 411 records relating to any proceeding under the Act available at the time of examination by the Commissioner. The above definition of record clearly shows the intention of the legislation in making the definition specifically restrospective in nature, as to the meaning to be given to the word " record ". Examining the case in the light of the definition now brought into existence, the results of the survey made by the department after the completion of assessment will form part of the record and the Commissioner will be entitled to take into account such results for purpose of deciding whether a particular order passed by the ITO is erroneous and prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
