HANUMAN TRADING CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PURSUANT to the directions given by this Court in ITC No. 68 of 1978, by order dt. 31st March, 1980, the following question has been referred by the Tribunal, Delhi Bench "C" (for short the "Tribunal"), for the opinion of this Court :

(2.) THE background facts as indicated in the statement of case are as follows : For the asst. yrs. 1962 -63 to 1966 -67 assessments were completed originally under S. 143(3) of the INCOME TAX ACT, 1961 (for short the "Act"), on several dates. At that point of time, the assessee had filed a trial balance sheet. The said trial balance sheet showed a cash credit in the names of Lekh Raj Manak Chand and Afghan Fruit Company. The ITO issued a query dt. 14th Dec., 1962, which contained names of these two parties. The assessee submitted a certificate from Afghan Fruit Company. Subsequent to the assessment, the ITO came to know that the two parties, i.e., Lekh Raj Manak Chand and Afghan Fruit Company, were bogus name lenders and, therefore, initiated proceedings under S. 147(a) of the Act, after obtaining an approval as required under the said provision. The reasons for entertaining the belief were recorded in the proposal for reopening as follows :