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TMI Blog1983 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ; as at the end of October 12, 1962, out of the intangible additions made in the assessee firm's assessment for the assessment year 1961-62 ?" The assessee is a firm of wholesale dealers in paper. Its head office is in Delhi and it has a branch in Calcutta. It has also a factory at Bahadurgarh run since June 15, 1969, under the style of Hanuman Paper Company, where colouring and glazing of paper is done. The assessee introduced in the books of account of the Calcutta branch relevant to the assessment year 1965-66, four different amounts totalling Rs. 45,000. The assessee had claimed the amounts to be genuine items of loan. The claim was, however, rejected by the ITO according to whom, the parties were mere name-lenders. The assessee cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1963-64, involving the addition of Rs. 25,000 introduced on October 12, 1962, in the name of M/s. Daluram Gagan Mull. On this basis, they found that the maximum amount of the intangible additions made in the past years which could legitimately have been expected to remain with the assessee at the end of October 12, 1962, was Rs. 5,774 and not Rs. 58,202 as held by the AAC in his order dated August 10, 1972. Taking into account certain other amounts which could have been drawn on by the, assessee for the purpose of the deposits aggregating to Rs. 45,000, they held further that Rs. 19,000 on an aggregate may have been available. Accordingly, they set aside the order of the AAC and restored the addition of uncovered balance of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 1961-62. The matter had come up for consideration before the Tribunal in connection with an appeal filed by the ITO against the AAC's order deleting Rs. 25,000 from the total income for the assessment year 1963-64. The Tribunal remanded the case to the AAC by an order dated July 18, 1970 in I.T.A. No. 1915(DEL)/1968-69. Their observations and directions regarding the various issues considered by them are reproduced below : "Issue No. 1 Whether the additions made for the assessment year 1961-62 on account of cash credits and interest can be held to have been available for reinvestment in the accounts for the assessment year 1963-64. The Tribunal observed,'it could be said that this sum was available with the assessee pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and passed an order dated August 10, 1972, in Appeal No. 1039/1971-72 repeating the deletion of Rs. 25,000 from the total income for the assessment year 1963-64. The AAC recorded his findings regarding the issues on which the Tribunal had issued directions. We are not referring to the various calculations made by the AAC. The AAC, found that the assessee had converted a part of its undisclosed stock into cash. The total cash in hand on October 12, 1962, was calculated by the AAC. The AAC then found that daring the cash introduction of Rs. 25,000 on October 12, 1962, some balance was available. The balance available was determined by him at Rs. 58,202 as at the close of October 12,1962. The Tribunal in the appeal from which this refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction on 12-10-62. In the name of M/s. Daluram Gagan Mull 25,000 Maximum cash available at the end of 12-10-62 out of the additions made for the assessment year 1961-62 5,774 against 58,202 worked out by the Appellate Assistant Commissioner in his order dated 10-8-72. " The law is settled that when an intangible addition is made during assessment proceedings, it is on the basis that the amount represented by that addition constitutes undisclosed income of the assessee. That income, although commonly described as intangible, is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. In the case before us, the addition of Rs. 70,000 in the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavit that this sum was out of the intangible additions of 1961-62. The assessee had not placed on record any material showing that the stocks were converted into cash. The assessee had failed to explain that the amounts, namely, the cash credits, came out of the intangible additions made to the assessee's income in the earlier assessment year. Apart from it, the Tribunal went into the accounts itself and found that only a part of the amount was available out of the intangible additions. The questions of fact are for the Tribunal to decide and this court cannot go behind the findings of fact recorded by the Tribunal. Accordingly, we answer the reference against the assessee and in favour of the Revenue with no order as to costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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