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TMI Blog1994 (11) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... 110 from his wife, Mrs. Aruna Sarkar. It was further explained that Mrs. Aruna Sarkar had advanced the loan of Rs. 1,92,480 and Rs. 1,60,000 to the assessee after taking loan from ITC and M/s Esskey Pictures International (EPC for short) respectively. The Assessing Officer (A.O.) requested the assessee to furnish the PA No. of EPC but the assessee failed to do so. The A.O. also issued a summon under sec. 131 which was served on EPC fixing the case for hearing on 26-3-1990 but there was no compliance. Under these circumstances the A.O. treated the loan transaction with EPC as bogus and accordingly the amount of Rs. 1,60,000 alleged to have been advanced to the assessee by his wife is treated as assessee's income from undisclosed sources. 3. Before the CIT(A) the assessee submitted a copy of Mrs. Sarkar's statement of affairs, confirmation as to her accommodating loan of Rs. 3,38,110 to the assessee, copies of demand notice under sec. 156 for assessment years 1983-84 and 1987-88 in her case and statement of account she had with EPC for financial years 1985-86 and 1986-87. On the basis of these documents it was submitted before the CIT(A) that in her assessment the sources of funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the A. O. is at liberty to take action in this respect in the hands of the assessee's wife. Being aggrieved by this order of the CIT(A) the revenue has preferred this appeal to Tribunal. 4. The learned departmental representative (D.R.) relied on the order of A. O. and submitted that this is a loan taken by the assessee from his wife and, therefore, this case is altogether different from other cases in which relatives are not creditors. He further argued that in this case the assessee has established only the identity of the creditor. It was further contended by him that the assessee has completely failed to establish the creditworthiness of the creditor and genuineness of the transaction. In order to support his contention the learned D.R. placed reliance on the following decisions : 1. Shankar Industries v. CIT [1978] 114 ITR 689 (Cal.); 2. Jamnaprasad Kanhaiyalal v. CIT [1981] 130 ITR 244 (SC); 3. Oriental Wire Industries (P.) Ltd. v. CIT [1981] 131 ITR 688 (Cal.); 4. Addl. CIT v. A.L.N. Rao Charitable Trust [1976] 103 ITR 44 (Kar.). Learned counsel for the assessee, on the other hand, filed paper book containing a letter of confirmation, statement of total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assessee is not known except few drafts. Datewise and amountwise transaction of loan advanced to the assessee is not furnished; (v) No copy of bank account is furnished by creditor; (vi) How the assessee being a debtor is creditor of his wife, Mrs. Aruna Sarkar to the extent of Rs. 1,02,000 is not known and there is no reconciliation for the same; (vii) The assessee has also not furnished copy of his bank account to prove the receipt of loan and payment of loan; (viii) The assessee has also failed to furnish copy of statement of affairs with creditor to prove the debit and credit. 6. These evidences are of corroborative value and are within the reach of assessee, yet he has chosen not to furnish them. In view of this and in the absence of these evidence we cannot act on interested testimony of the assessee alone. The law of evidence mandates that if the best evidence is not placed before the Court, an adverse inference can be drawn as against the person who ought to have produced it. Our view is duly supported by the Madras High Court decision in the case of CIT v. Krishnaveni Ammal [1986] 158 ITR 826. In this view of the matter the CIT(A) was apparently wrong in hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Madras High Court is not applicable to the present case. 8. In the case of Orissa Corpn. P. Ltd. the assessee produced confirmation and discharged hundies and gave particulars of creditors as assessee. Summon under sec. 131 was issued but was returned with the remark 'left'. No further attempt was made to examine the sources of credit. It was held by the Supreme Court that Tribunal's findings that the assessee has discharged onus aree based on evidence and no question of law arises. We notice that in the case of Orissa Corpn. P. Ltd. all particulars of creditor were given while in the present case they are not furnished. In that case no further attempt was made to examine the source of credit but in the present case attempt was made by the A. O. to verify the credit by issuing summons to EPC. Moreover, as stated above in this case onus of proving the credit by explaining satisfactorily by producing evidence and witnesses was not discharged as it was done in the case of Orissa Corpn. P. Ltd. As the facts and circumstances are different the decision of Supreme Court on which reliance is placed by the assessee's counsel is not applicable to the instant case. 9. Reliance is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned D.R. are applicable to the present case. In the case of Shankar Industries the Calcutta High Court has held that identity of creditor, capacity of creditor to advance money and genuineness of transaction must he proved prima facie, by the assessee and only after the assessee has adduced evidence to established prima facie, the aforesaid, the onus shifts to the department. It was further held that where the assessee established only the Identity of creditor and nothing more the cash credit can be treated as the income of the assessee from undisclosed sources. As the assessee has proved only identity of the creditor in the instant case the ratio of Calcutta High Court decision In the case of Shankar Industries is squarely applicable to the present case. In the case of Jamnaprasad Kanhaiyalal the Supreme Court held that the ITO was justified in treating the cash credit appearing in the books of accounts of the assessee as the assessee's income from undisclosed sources since the assessee failed to discharge the burden of proof placed upon it under sec. 68 of Income-tax Act, 1961. Then In the case of Orient Wire Industries (P.) Ltd. as there was no evidence to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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