9911796707
TMI Blog1986 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the application of the Revenue under section 256(1) of the Income-tax Act, 1961, as also the order of this court passed under section 256(2) of the Act directing the Tribunal to refer the questions are also not included. In spite of the aforesaid, learned advocate for the Revenue and Mr. R. N. Dutt, learned advocate, who was appointed by us as amicus curiae, as no one was appearing for the assessee, submitted that the question can be answered on the basis of the order of the Tribunal where the orders of the Income-tax Officer and the Appellate Assistant Commissioner had been dealt with. Accordingly, we have taken up the hearing of this reference. The material facts are, inter alia, that in the assessment year 1962-63, the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the distributable surplus for the purpose of declaration of dividend. The Appellate Assistant Commissioner rejected this contention of the assessee and affirmed the order of the Income-tax Officer. Being aggrieved, the assessee went up in further appeal before the Income-tax Appellate Tribunal. It was reiterated before the Tribunal that the addition did not represent commercial income of the assessee and further that section 104 of the Income-tax Act, 1961, being penal in nature it was for the Revenue to prove that the addition represented commercial income which the Revenue failed to do. It was contended further that, in fact, there was a commercial loss in the assessment year in question and the assessee was not required to distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Division Bench of this court held that the failure of the assessee to prove the genuineness of a loan transaction may give the right to add back the amount to the income of the assessee for the purpose of assessment. It was further held that in a particular case, the facts and circumstances might also justify a finding that the amounts added back are available for distribution as dividend for the purpose of section 23A of the Indian Income-tax Act, 1922 (which is in pari materia with section 104 of the Income-tax Act, 1961), but where there was no other fact except that the assessee had failed to prove the genuineness of the loan transaction, the amount added back would not be available for the purpose of considering the distributable su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in the said section strictly. The burden lay on the Revenue to prove the conditions laid down in the section. The decision of the Karnataka High Court in Somasundaram (P.) Ltd. v. CIT [1985] 152 ITR 664 was also shown to us for the proposition that where an assessee had entered into a settlement with the Revenue under section 271(4A) of the Income-tax Act, 1961, and had admitted items of income and subsequently brought the same into the books, only then could the same be taken into consideration for determining the available surplus. The amicus curiae drew our attention to the orders of the Tribunal and the Appellate Assistant Commissioner passed in the assessment proceedings which have been enclosed in the paper book, recording that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and decided farther whether the amount added represented a part of the commercial profits of the assessee and was available to the assessee for distribution by way of dividend. The matter was remanded to the Tribunal. (c) CIT v. Sahibganj Electric Cables (P.) Ltd. [1983] 144 ITR 422 (Cal). In this case, an addition was made to the income of the assessee as income from undisclosed sources as the assessee could not establish that the amounts represented valid and genuine loans. On an appeal before the Tribunal, the assessee admitted that half of the amounts added represented loans which were not genuine. The addition of the admitted amount was sustained by the Tribunal. Thereafter, proceedings were initiated under section 23A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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