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TMI Blog1997 (6) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 was added to the assessees income under s. 68 of the Act at the same time adding Rs. 1,828, interest payable by the assessee in respect of aid loan amount on first appeal. It was confirmed on the ground that the assessee has failed to discharge the onus which lay on it under s 68 of the Act. 4. We have heard both sides, and also perused the relevant documents placed by the assessees counsel in his paperbook. In our view, though there was no confirmatory letter from the assessee, the assessee tried to explain how that lady came into possession of Rs. 18,000 which was by loans obtained from two different parties who were Income Tax assessees and who filed explanation in support of the explanation given by the assessee. The loans by the two persons to the lady Smt. Girja Devi were through account payee cheques and the lady Smt. Girja Devi also gave loans to the assessee by account payee cheques. In our view it can be safely said that the assessee discharged the onus which lay on him under s. 68 of the Act. The Hon'ble Patna High Court in the case of Addl. CIT v. Bahri Bros. (P) Ltd. [1985] 154 ITR 244 (Patna) have laid down that if the loan transaction is routed through bank cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has stated in his assessment order that in the course of search operations silver account register for the period relevant to the asst. yr. 1983-84 was seized according to which the closing stock of the assessees business amounted to 39.406 kgs. as against 29.065 recorded in the trading account filed along with the return of income. The AO, therefore, added the value of the difference of 10.295 kgs. as no satisfactory explanation was tendered by the assessee. This addition was made as income from other sources. In first appeal it was stated that the difference in closing stock related to asst. yr. 1982-83 and the value in respect of the difference was added in that year. The AAC stated in para 13 of the impugned order that he found from the record that the amount of unexplained closing stock of silver was considered at 10.786 kgs. in the asst. yr. 1982-83 since the closing stock as per the seized stock register amounted to 41.882 kgs. whereas 31.069 kgs. was shown in the trading account and, therefore, the AO added Rs. 22,864 as income from other sources for the asst. yr. 1982-83. For the asst. yr. 1983-84, the AO has mentioned that the assessee had shown stock of silver at 29.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of Rs. 6,891 and investment of Rs. 4,00,000 in the purchase of house by the assessee since reasons were specifically mentioned by the AO while making the addition of these items. For that the learned CIT(A) was further not justified in deleting the additions of Rs. 6,047 under s. 40A(3), Rs. 14,000 on low drawing and Rs. 1,02,329 on account of materials gathered from loose papers available from assessees premises. The additions were maintainable. 14. In respect of first ground, we are of the opinion, after hearing both sides that the AAC was not wrong in setting aside the assessment and remanding the matter for fresh investigation in respect of cash credits of Rs. 69,000 and the interest thereon amounting to Rs. 6,891. We also do not wish to find fault with the AAC in remanding the matter to the AO with a direction to re-examine the matter regarding the purchase of a house property of Rs. 4,00,000 claimed by the assessee to have been purchased by his family members and for which proper evidence was not appreciated by the AO in a right and proper perspective. We agree with the AAC and dismiss ground No. 1 of the Revenues appeal. 15. We have heard representatives of both sides in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the loan. I, therefore, with respect, propose a separate order in respect of the above. 21. According to the assessment order, the assessee showed loan of Rs. 18,000 from Smt. Girija Devi in his books of account. The assessee was asked to do the following by a letter dt. 26th November, 1985 : (1) establish the identity of the cash credit, (2) prove the capacity of the creditor to advance the loan, (3) adduce evidence regarding the genuineness of the loan transaction. The assessee was also required to produce the cash creditor for examining her in the office. 22. The reply was received from the assessee saying that Smt. Girija Devi had furnished confirmatory letter regarding deposit of Rs. 18,000 with the sources. However, it is stated in the assessment order that no confirmatory letter was filed. Nothing whatsoever had been stated by her regarding the source of the amount in the reply mentioned above. However, subsequently during the assessment proceeding, two letters were filed - one was a letter from one Shri Onkar Nath, who stated that he advanced Rs. 8,000 to Smt. Girija Devi. The second letter, signed by one Smt. Damyanti Devi, merely stated that Smt. Damyanti Devi gave a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the CIT(A) did not admit the additional evidence, though he has not specifically said so. This conclusion is evident since he has made no observation on the submission regarding payment by cheque before him and has not recorded any reason for admission of additional evidence. In the facts and circumstances of the case, when no case was made out by the assessee for production of additional evidence, I agree with the CIT(A) that it could not have been admitted. 28. Similarly, additional evidence is not admissible before the Tribunal, where even a letter, claiming to be a confirmatory letter from Smt. Girija Devi, has been filed. I, therefore, decline to consider it, including photocopy stated to be of bank account of Smt. Girija Devi. This is particularly so since no reason has been advanced before us for producing the additional evidence and also because no opportunity has been allowed to the Department to rebut it. 29. In the above circumstances, the case of Addl. CIT v. Bahri Bros. (P) Ltd. [1985] 154 ITR 244 (Patna) , relied upon in the proposed order of my learned brother, becomes distinguishable on facts. In that case, it was an accepted position that lenders made paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is referred to the Third Member for his opinion, which is as follows : Whether, in the facts and circumstances of the case and in law, addition of cash credit of Rs. 18,000 under s. 68 of the Act and disallowance of payment of interest of Rs. 1,828 on the cash credit should be upheld or deleted ? I want through the differing orders of the Members and I felt that the main question to be decided by me would be the admissibility of the additional evidence which was produced by the assessee before the Tribunal. 2. One Smt. Girija Devi was the cash creditor. The case of the assessee was that she had deposited an amount of Rs. 18,000 on 3rd September, 1982, in the books of account of the assessee. Smt. Girija Devi advanced this loan by means of a cheque No. 0021927 dt. 3rd September, 1982. Out of Rs. 18,000 thus deposited by Smt. Girija Devi, a sum of Rs. 8,000 was received as loan by her from Shri Onkar Nath, advocate, and a sum of Rs. 10,000 from Smt. Dayawanti Devi. Shri Onkar Nath, advocate, is an assessee with Permanent Account No. 17-005-PT-7731. Similarly, Smt. Dayawanti Devi was also an Income Tax assessee with GIR No. D-890. After thus borrowing Rs. 18,000 from both Shri Onka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcept recording them in his impugned order. By simply observing that the assessee did not furnish any confirmation from the creditor and also by observing that the assessee failed to produce the cash creditor for examination, he confirmed the addition of Rs. 18,000 and disallowed the interest of Rs. 1,828 thereon. 4. When the matter was brought to the Tribunal in second appeal, written submissions were filed on behalf of the assessee. In those submissions, inter alia, it was submitted that Smt. Girija Devi advanced the sum of Rs. 18,000 by cheque No. 0021927, dt. 3rd September, 1982, drawn on Bank of India, Gaya. She was an identifiable and genuine person and the sources were fully explained and could be verified from scrutiny of her bank account. A copy of her bank account was also furnished in the paper book. A confirmatory letter purported to have been given by Smt. Girija Devi was also furnished in the paper book. 5. In the order of the learned A. M., Shri V. K. Sinha, it is stated that in the opinion of the learned A.M., it is the evidence produced before the AO which is relevant and not the subsequent evidence. Since, it was not mentioned before the AO that the loan had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. While admitting that additional evidence, the appellate authority should allow a reasonable opportunity to the AO to examine the evidence or document or to cross-examine witness produced by the assessee or to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. Thus, r. 46A(3) contemplates not only production of evidence but also examination of witness before the first appellate authority as additional evidence. Now, in this case, the assessee has been contending that he had already filed a confirmatory letter from Smt. Girja Devi. The AO denies this fact and says that it was never filed. One of the documents filed before the CIT(A) was the confirmatory letter from Smt. Girja Devi. It is not mentioned by the learned A.M. that the documents produced before the learned CIT(A) were not given notice of to the AO nor was it taken that no reasonable opportunity to examine the evidence or document or to produce any evidence in rebuttal was not given to the AO. Further, the learned CIT(A) did not specifically state that the additional evidence was not admitted and the reasons for doing so. Under r. 46A(4), the CIT(A), on his o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s produced at a later stage. The bank account cannot be manufactured or concocted to suit the convenience of any party. An extract of the books of account maintained by the bank is very much relevant under the Bankers Books Evidence Act. I, therefore, hold that the learned A.M. is not justified in rejecting the additional evidence or in concurring with the purported decision of the CIT(A) in rejecting the additional evidence produced before him. Smt. Girja Devi was stated to be the wife of Shri Dwarika Prasad himself and she is also stated to be an assessee in Ward No. I, Gaya. It is stated now before me that Smt. Girja Devi was having SB A/c No. 2675 in Bank of India, Gaya. From that account, she had issued a cheque bearing No. 0021927, dt. 3rd September, 1982 for Rs. 18,000 in favour of her husband, Shri Dwarika Prasad. Under the circumstances. I completely agree with the learned J.M. that the ratio of Hon'ble Patna High Court in Addl. CIT v. Bahri Bros. (P) Ltd. [1985] 154 ITR 244 (Patna) stands attracted to the facts of the present case even though Smt. Girja Devi herself was not examined by the assessee. The fact that she had borrowed Rs. 10,000 from Smt. Dayawanti Devi an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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