1994 (2) TMI 38

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..... sued letters to them calling upon them to explain the source. Letters addressed to some were returned unserved with the postal endorsement "addressee left". The Income-tax Officer was of the opinion that the abovementioned persons were not genuine creditors. So he referred the matter to the Inspecting Assistant Commissioner under section 144B of the Income-tax Act. The Inspecting Assistant Commissioner gave further opportunity to the assessee to produce the so-called creditors. Six of them appeared before the Income-tax Officer. After examining them, the credit in the name of one person was accepted and the others were disallowed. Thus the final assessment order contained an addition of Rs. 3,86,500. On appeal, the Commissioner of Income- .....

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..... assessee brought to the notice of the Tribunal that in the draft assessment proceedings they had taken a stand that the boats have been sold to the respective creditors in the subsequent years and this fact was not taken note of by the Tribunal while disposing of the appeals. The Tribunal did not accept that petition. According to the Tribunal, there was no mistake in the order of the Tribunal. Consequently, the Tribunal rejected that petition. The assessee then prayed for reference to this court under section 256(1) of the Income-tax Act. Pursuant to that application, the following question was referred by the Tribunal : "On the facts and circumstances of the case, whether the Tribunal was justified in holding that no mistake in law had .....

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..... y made the advance towards the sale consideration for the boat belonging to the assessee. This contention of the assessee does not appear to have been properly dealt with by the Tribunal while disposing of the appeals filed by the Department and the assessee. The contention raised by the assessee was taken note of by the Tribunal when it observed in paragraph 5 as : " In fact, these people are not money-lenders but they had given the money towards security advance for the purchase of trawlers and in the subsequent year they had purchased all the 12 boats. Therefore, there was no material either for the Income-tax Officer or for the Commissioner of Income-tax (Appeals) to doubt the transactions, to treat them as fictitious and to add the s .....

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