CIT Vs. S. KANNAIYAN

JUDGEMENT

(1.) THIS appeal is filed by the revenue under 1 Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), against the order of the Income Tax Appellate Tribunal dated 29 -8 -2003, made in I. T. A. No. 1801/Mds/1996, raising the following substantial questions of law : 1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessing officer was not correct in invoking Sections 69 and 69A of the Income Tax Act, 1961, in the hands of the persons in whose names the monies stood invested on the ground that some members of the public have claimed monies as belonging to them and that too in the absence of any corroborative evidence ?

(3.) Heard learned counsel appearing for the revenue. In our considered view, it is relevant to notice the operative portion of the order of the Appellate Tribunal, which reads as follows : It would, therefore, be necessary to link up all these amounts with the books of the firm and to the extent it is shown as received by the firm as deposits from various persons, it is necessary to examine the income earned on those deposits like interest on deposit with the bank and any other investment. The expenditure that has to be allowed is with regard to administrative and incidental expenses incurred in connection with earning of the income and such other normal expenses of the firm. Wherever the amounts found in the names of various individual persons, relatives, close friends, etc., which could not be linked with the accounts of the firm, it would be necessary for such individuals to explain. In the interest of natural justice and fair play it would be necessary to examine the firm on the one hand along with the various individuals with the account books of the firm to appreciate that the moneys belong to the various persons. 'What is claimed by the public as money belonging to them, which has been frozen by the police and the department, in these circumstances would not be treated as income from unexplained source, namely cash credits. We direct the assessing officer to examine the above closely with all the above facts. He shall also consider the various criminal proceedings. He shall also co -ordinate with the police authorities. He may call for the various depositions. He may call for such information of the claims made by various deposits against the firm as alleged in the courts.

(4.) A perusal of the above observations made by the Tribunal makes it clear that none of the observations would affect the interest of the revenue. Further, learned counsel appearing for the revenue is also not in a position to point out an)/ of the observations of the Tribunal attracting a substantial question of law. In the circumstances, we find no question of law much less a substantial question of law that arises out of the order of the Appellate Tribunal for our consideration. Accordingly, the appeal fails and the same is dismissed. No costs. Connected T. C. M. P. is closed.