9911796707
TMI Blog1980 (2) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1969-70 in CWP No. 3132 of 1972. The petitioner filed the returns for the relevant years along with certain documents supporting the returns. A list of 27 persons to whom interest was paid by the was furnished before the ITO. The assessment proceedings were completed on 3rd January, 1971. Vide the impugned notices issued under s. 147 of the Act in both the writ petitions, the ITO sought to reopen the assessments made, as it was found that the assessee's income escaped assessment within the meaning of s. 147 of the Act. It has been averred in the petitions that the issuance of the notices is without jurisdiction as the ingredients of s. 147 of the Act are not satisfied. In para.11 of the return, filed in CWP No. 3018 of 1972, it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodation entries technically called " C " class hundi loans. This means that no money had actually passed but the so-called creditors were name-lenders only. The interest paid to these creditors, as entered in the books of the assessee as well as the creditors was at a highly inflated figure whereas in fact only small amounts of commission were paid by the assessee for the accommodation received from these so-called creditors. The correct amounts of these commissions were entered in the books of the aforesaid broker which represented the real state of affairs with regard to these transactions. Thus, neither the books of the petitioner nor the books of its so-called creditors carried the true nature of the transactions. The true nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guru Tegh Bahadur Trading Co. Anandpur Sahib, Rs. 10,000 on 14-4-1969. The amount of interest actually paid by the assessee in respect of these loans is much less than the amount claimed by the assessee in its books. The interest payment vouchers seized by the department mentioned the amount of interest actually claimed by the assessee in its books, but the amount of interest actually paid which is a smaller amount finds place in the seized diaries of the broker. These loans are obviously havala loans and the lenders are merely name-lenders. I have, therefore, reasons to believe that due to failure on the part of the assessee-firm to disclose fully and truly all material facts necessary for its assessment the income of Rs. 44,000 plus ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 (xiii) Pooran Singh 5,000 (2) If the abovementioned loans are through the broker, then datewise details of brokerage paid and mode of payment. (3) Interest paid in respect of the above 13 loans with effect from 1-4-1968 to the date of squaring up of last account, indicating the date and the mode of payment and whether paid directly or through any broker. If through the broker, then his name also. (4) When were the 13 loans paid off, with mode of payment ? (5) Intimate the date on which the loans in the names of Surinder Singh and Pooran Singh originated in the books of the assessee.' The assessee as well as his counsel, Sarvshri O.P. Bansal and J.P. Kohli, advocates, promised to furnish these particulars by the next date, i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbans Lal who was operating on a large scale. The books seized from his residential premises were maintained in Mahajani script. These books were examined by Shri J. Kathuria who was then the ITO, District 1(10), Ludhiana. As a result of his examination Shri J. Kathuria found that Shri Harbans Lal was acting as the petitioner's broker also in a large number of transactions. On examination of the books of Shri Harbans Lal it was found that many of the transactions recorded in the books of the petitioner were accommodation entries technically called " C " class hundi loans. This means that no money had actually passed but the so-called creditors were name-lenders only. The interest paid to these creditors, as entered in the books of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of these records the Income-tax Officer, Special Circle, 'A' Ward, Ludhiana, sent the information that the assessee-firm had introduced its own black money into the books of account during the financial year 1968-69 in the guise of alleged loans from the following parties : (1) Shrimati Ratan Devi, wife of Shri Ram Lal, c/o. Rajasthan Textile Supply Co., Poorani Kotwali, Ludhiana, Rs. 5,000 on 31-3-1969. The amount of interest actually paid by the assessee in respect of these loans is much less than the amount claimed by the assessee in its books. The interest payment vouchers seized by the department mention the amount of interest actually claimed by the assessee in its books, but the amount of interest actually paid which is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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