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TMI Blog1985 (4) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the pass book with a view to verify whether these loans were actually routed through the pass book and further to show that the amount withdrawn from the firm Eastern Engineers was actually invested in the purchase of this property. The assessee filed copy of the suits filed by Indian Carbon Co. and Keshavji Naik Trust against the assessee (Suit Nos. 606 of 1974 and 853 of 1974). The ITO insisted that the assessee should produce the pass book of the bank so that the ITO could verify whether the loans taken from the above parties had been invested in the purchase of the said immovable property and not for any other purposes and further the amount of Rs. 15,000 withdrawn from the capital account of the firm had not been withdrawn for domestic expenses. It was submitted on behalf of the assessee that the pass book was missing and, hence, could not be produced. The ITO observed that in the absence of pass book, it was not conclusively proved by the assessee that those amounts which had been obtained from those parties had actually been invested in the purchase of the said property. He further found that there was some difference in the amount of borrowing from Indian Carbon Co. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the assessee, she had received loans of Rs. 25,000 and Rs. 60,000 from those parties, respectively, making in all Rs. 85,000. According to those two parties, the loans advanced were Rs. 55,000 and Rs. 60,000 making in all Rs. 1,15,000. The difference has arisen because the assessee claims to have paid Rs. 30,000 while this payment is not accepted by the creditor. Consequently, the fact that there was dispute about the actual amount would not, in the circumstances, render the explanation of the assessee regarding investment unbelievable. There can be no doubt that amount of Rs. 85,000 obtained from those two creditors had been invested in the purchase of the property. The absence of pass book in the circumstances of the present case would not give rise to any adverse inference. As regards balance amount of Rs. 15,000, the amount has been withdrawn from the firm of Eastern Engineers. This fact is supported from the copy of the account filed. The assessee was residing with her husband, who was an advocate, and as such, there is no ground to presume that Rs. 15,000 has been withdrawn for household expenses. There is no reason to reject the observation of the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot co-operating with the ITO, Porebunder in the enquiry for that loan. Consequently, summons under section 131 of the Act dated 15-11-1979 was issued by the ITO, Bombay, calling upon the assessee to produce all documentary evidence in that connection. A notice under section 142(1) of the Act was also issued calling upon the assessee to produce evidence in support of the loan received. Opportunity was given to produce profit and loss account and balance sheet and pass book. However, the representative of the assessee expressed inability of the assessee to produce the said documents. About the pass book, the explanation was that it was missing. The representative of the assessee pleaded before the ITO that only evidence on which he relied was the affidavit of Shri Markhi Ganga, which is said to have been sworn at Porebunder. The ITO observed that the real documentary evidence was the pass book of the assessee for the relevant period and that affidavit alone would not be sufficient to prove the receipt of the said amount from Shri Markhi Ganga. The assessee was also asked to produce copy of the accounts of the assessee in the books of account of Shri Markhi Ganga. This was also not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. Before the Commissioner (Appeals), the assessee had produced certificate from Gram Panchayat of Mul Madhavpur in which it was stated that Shri Markhi Ganga owned 40 acres of land and that the average annual income was Rs. 35,000. This document was not produced before the ITO. The learned departmental representative has objected that the said document should not have been relied on by the Commissioner (Appeals) since it was produced for the first time before him. We may ignore this objection and consider this document. However, what all this document indicates is that Shri Markhi Ganga had 40 acres of land. This fact by itself does not take the matter much farther. What the assessee has to prove is that Shri Markhi Ganga was in possession of cash amount of Rs. 1,15,000 on 23-5-1967 and that the said amount had been given in cash by the said Shri Markhi Ganga, to the assessee as loan. For this purpose, the best evidence would have been that of Shri Markhi Ganga. The assessee should have produced Shri Markhi Ganga before the ITO, Bombay so that the ITO, Bombay, would have cross-examined Shri Markhi Ganga and found out that this assertion was believable. The submission of Shri Har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this letter was sent on 7-4-1979 by the husband of the assessee in the capacity of husband of the assessee as well as son-in-law of Shri Markhi Ganga. It is mentioned in that reply that it was difficult for Shri Markhi Ganga to appear at Porebunder because he was an old man and as such necessary enquiry should be made from the assessee and further that Shri Markhi Ganga should not be harassed. We do not find any material to indicate that the ITO, Porebunder had accepted the loan as genuine. In fact when Shri Markhi Ganga showed that loan as asset the ITO, Porebunder had to assess him. It was expressly stated before us that any part of the loan amount has not been paid by the assessee to Shri Markhi Ganga till the date of arguments before us. Considering all the circumstances, we hold that the assessee had failed to prove that Shri Markhi Ganga had given loan to the assessee on 23-5-1967 in cash and that it was that cash amount which she had deposited in the firm. The assessee has failed to prove the real source of this amount and in the circumstances of the present case, the ITO was fully justified in inferring the said amount represented income from undisclosed sources. The reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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