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TMI Blog2005 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... r 7, 2002, for the assessment year 1991-92. The aforesaid appeal has been admitted by this court vide order dated April 21, 2003, on the following questions of law: "(ii) Whether, on the facts and circumstances of the case, the Tribunal was legally correct in holding that the assessee was the owner of the demand drafts of the aggregate value of Rs. 12,79,433 and addition for the same had rightly been made in its hands, by invoking the provisions of section 69/69A of the Act? (iv) Whether in the absence of any material having been brought on record to show that it was the assessee who made investment in the said demand drafts of the value aggregating Rs. 12,79,433 (Rs. 7,36,921 + Rs. 5,42,512) the Tribunal was legally correct in holding that the provisions of section 69 were applicable and in further taking a view that the source of investment in such demand drafts remained unexplained, so as to attract additions for the same in its hands?" The brief facts of the case are as follows: The dealer/assessee (hereinafter referred to as the "assessee"), was carrying on the business of manufacture and sale of glassware. For the manufacturing of glassware, the assessee required co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer noted that the original agreement was not being produced. This agreement was not registered. The Assessing Officer further mentioned that the assessee was required to produce the partner of M/s. Sweta Coal Sales Corporation for cross-examination both during the proceedings under section 132(5) as well as during the current assessment proceedings. However, he failed to produce this party. On the request of the assessee, direct summons were also issued by the Assessing Officer to Shri Krishan Kumar Thakkar. However, he failed to attend. The Assessing Officer also issued summons directly which were received back unserved with the remark "addressee not known at the given address". Therefore, the direct enquiry was also sent to the Income-tax Officer, Calcutta, in the case of M/s. Arkay Glass Works, the sister concern of the assessee. The Income-tax Officer, Calcutta, reported that M/s. Sweta Coal Sales Corporation to whom summons were issued, did not produce the books of account. The facts of Shri Krishan Kumar Thakkar being unknown at the given address and failing to attend before the Assessing Officer were made known to the assessee. The Assessing Officer mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order, the Assessing Officer inferred that the investment of Rs. 5,42,512 had been made by the assessee and as such, he made the addition under section 69 of the Act. On appeal, the assessee contended that the investment of Rs. 7,36,921 had been really made by M/s. Sweta Coal Sales Corporation as per agreement. The assessee further submitted that the original agreement was with the Calcutta party but both the copies had been certified by the notary. It was further submitted that M/s. Sweta Coal Sales Corporation was an existing person on whom summons were served. Regarding the lifting of 1200 m.t. of coal by Shri Arjun Thakur, it was submitted that he was an employee of M/s. Sweta Coal Sales Corporation. It was also submitted that the coal lifted by him in June, 1990, was not immediately sent to use due to panic amongst the agents due to income-tax raids but was actually sent in January and February 1992, when it was recorded in the books. It was stated that during the intervening period the coal remained with the agent in his godown. It was further stated that blank letter papers with signatures were supplied to M/s. Sweta Coal Sales Corporation who authorised Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rebut this observation of the Assessing Officer. In these circumstances, I agree with the Assessing Officer that the investment of Rs. 7,36,921 has been by the appellant from undisclosed sources. The addition is confirmed." "I am also not impressed with the contention that in respect of drafts for Rs. 5,42,512 the signatures of Shri Bansal, partner, had been forged by somebody on various applications, papers including affidavits filed with the Director of Industries, Kanpur, and CCL. The legal presumption is that the apparent is real unless proved otherwise. The appellant has not filed any evidence or expert opinion in support of its claim. It also did not request the Assessing Officer to obtain expert opinion. The affidavit is sworn before the notary and the identity of the persons swearing the affidavit id certified by some responsible person. The story of forged signatures does not carry any conviction with me. On the facts as contained in the assessment order, the Assessing Officer was justified in reaching the conclusion that the investment of Rs. 5,42,512 had been made out of unexplained funds. The addition is confirmed." Against the order of the Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -92. Thus the assessee's own admission clearly established that the investment in the draft of Rs. 7,36,921 and Rs. 5,42,512 has been made by the assessee-firm and has not been made by any outside party. The contention of learned counsel that the said letters have been issued by the erstwhile partner after his retirement does not make any difference as the admission by the said party has been made in respect of the assessment year 1991-92 when he was very much a partner of the assessee-firm. In the facts and circumstances of the case, we hold that the impugned investments in the drafts have been made by the assessee-firm. Therefore, the lower authority was justified to make the impugned additions." We have heard Sri S.K. Garg, learned counsel for the appellant, and Sri Shambhu Chopra, learned standing counsel appearing on behalf of the Revenue. Learned counsel for the appellant submitted that the Tribunal has erred in confirming the addition of Rs. 12,79,433 under section 69A of the Act. He submitted that the draft of Rs. 5,42,512 was not got prepared by the appellant and the entire documents relating thereto, were not submitted by the appellant and the signatures of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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