S PUNJABI Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is an appeal filed by the assessee against the order of the Commissioner (Appeals) relating to the assessment year 1985-86. The first ground of appeal regarding the disallowance of Rs. 28,500 has not been pressed by the authorised representative of the assessee and it is, therefore, dismissed as not pressed.

(2.) Ground Nos. 2 to 9 relate to the main grievance of the assessee against the order of the Commissioner (Appeals) confirming an addition of Rs. 1,02,000 under section 69 to the assessee's income. The facts of the case have to be noticed before plunging into the provisions of section 69 of the Income Tax Act and the interpretation of the same. The assessee is an individual. For his failure to file the return of income, notice under section 148 was issued and on the basis of which the assessee filed income-tax return showing a loss of Rs. 8,980. There was a search in the case of the assessee on 16-9-1986. In the seized material it was found by the assessing officer that the assessee had deposited a sum of Rs. 70,000 in New Bank of India, Sowcarpet Branch, and two amounts of Rs. 25,000 each were advanced to one Mr. Karimbi on 31-7-1984. When asked to explain the sources for these investment, the assessee filed confirmation letters from 12 persons having received an amount of Rs. 1,12,000 in aggregate. Copies of these confirmation letters and the details of the parties as to their names, addresses and the amounts, are filed at pp. 1 to 8 of the paper-book. Copies of the confirmation were filed only in respect of seven parties before the Bench, while before the assessing officer as per the records, confirmation letters were filed in respect of 12 parties. The copies of confirmation letters were not found at the time of search. During the course of search the assessee did not disclose about these deposits and the money advanced to Mr. Karimbi. According to the assessing officer it was not clear from the confirmation letters that the amounts were not paid by the creditor by cash or by cheque to the assessee. There were no entries in the account books regarding the borrowings and the deposit amounting to Rs. 70,000 and the advance of Rs. 50,000 by the assessee to Karimbi. The assessee was given sufficient opportunity to produce the so-called creditors for his examination, as per p. 3 of the assessment order. But the assessee pleaded his inability to produce them, as eight of the creditors were stated to be at Bangalore and only one creditor was produced before the assessing officer. The assessee has not asked the assessing officer to issue summons under section 131 for verifying whether money has been advanced by these parties to the assessee or not before the assessing officer. The assessing officer, therefore, in the absence of non-production of these parties, added a sum of Rs. 1,20,000 to the income of the assessee as unexplained investment under section 69 of the Income Tax Act, 1961.

(3.) The matter went to the Commissioner (Appeals), who deleted an addition of Rs. 10,000 in respect of the money advanced by one M. Vijayaraghavan to the assessee in respect of which the assessee recorded a statement on oath on 30-1-1989. Thus, an addition of Rs. 1,10,000 was sustained by the Commissioner (Appeals) under section 69 relying on the decision of the Calcutta High Court in the case of C. Kant and Co. v. CIT, 1980 126 ITR 63 . Against the said addition the assessee has come up in appeal before us. The addition of Rs. 1,10,000 consisted of two items of Rs. 8,000 and Rs. 1,02,000. In respect of Rs. 8,000 the assessee's authorised representative was not able to show any source for the investment either before us or before the lower authorities. This addition was not specifically disputed by the assessee's authorised representative and in the facts and circumstances of the case we uphold the action of the Commissioner (Appeals) to the extent of Rs. 8,000.