9911796707
TMI Blog1994 (11) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy, Calcutta, were genuine transactions and the addition made under section 68 of the Income-tax Act, 1961, was untenable ? " Under section 68 of the Act if any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not satisfactory, then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. For the assessment year 1983-84, cash credits were found in the names of Messrs. Mineral Chemical Mart, Calcutta, and Mineral Supply Agency, Calcutta, amounting to Rs. 25,000 and Rs. 32,000, respectively. The Assessing Officer added the aforesaid amounts to the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on the appellant to establish the genuineness of such transactions ... " With the aforesaid conclusion, the order of assessment was set aside and the matter was remitted to the assessing authority to reassess after giving opportunity to the assessee to establish the genuineness of the transactions. The assessee carried the matter to the Tribunal in second appeal. The second appellate authority after consideration of the entire materials on record as well as the confirmation letters which were available in the paper book, came to hold that it cannot be said that the identity of the parties was not established. After thorough discussion of the entire materials on record, the second appellate authority recorded the finding that the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the assessee is required to establish the identity of his creditor, the capacity of the creditor to advance the money and the genuineness of the transaction. If the assessee establishes the aforesaid three pre-conditions, then it would be for the Department to disprove the same. In the present case, the first appellate authority as well as the Tribunal had accepted the identity of the persons who had entered into business with the assessee. The Tribunal further, relying upon the confirmation letters available in the paper book as well as all other relevant materials, recorded the finding that the transactions are genuine. The question posed for reference, therefore, requires an answer as to whether the Tribunal was justified in coming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to accept the contention of learned standing counsel for the Department that the finding of the Tribunal with regard to the genuineness of the transactions cannot be said to be a finding of a reasonable man, nor can we hold the said finding to be a perverse one. On the other hand, as a court of fact, the Tribunal has recorded the finding after consideration of all relevant and germane materials which it was entitled to. In the aforesaid circumstances, we answer the question posed against the Department and in favour of the assessee and hold that the Tribunal was justified in holding the transactions appearing in the names of Messrs. Mineral Chemical Mart, Calcutta, and Messrs. Mineral Supply Agency, Calcutta, to be genuine transactions an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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