PUSHKAR NARIN SARRAF Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the following three questions have been referred for our opinion :

(2.) THE facts relevant for answering the aforesaid questions are these. THE assessee is an individual who carried on the business of pawning and sarrafa. In addition, he also derived income from house property. THE questions referred for our opinion relate to cash deposits of the petitioners for each of the assessment years in question, namely, 1972-73 to 1976-77. THE assessee voluntarily filed a return on December 20/30, 1972, declaring an income of Rs. 6,000. THE assessment was, accordingly, completed under Section 143(1) on January 15, 1973. He, however, did not file any return for the assessment years 1973-74 to 1975-76 under Section 139 of the Income-tax Act. A search of the business and residential premises of the assessee was, therefore, ordered and it took place on June 22, 1976, as a consequence of which account books, diaries, pawning registers and other documents pertaining to the years 1968 to 1976 were seized. THE seizure was followed by reassessment which took place under Section 147(a) for the assessment years 1972-73 to 1975-76. In respect of the assessment year 1976-77, assessment was made under Section 139(2). In response to the notices issued to the assessee, he filed returns for the assessment years 1973-74 to 1976-77 declaring an income of Rs. 6,000, Rs. 6,000, Rs. 6,500 and Rs. 7,500, respectively. For the assessment year 1972-73, however, the income declared was the same as originally declared. THE account books seized were found to be incomplete. However, the gathond registers showed that some amounts had been advanced by the assessee and that the assessee had repawned ornaments to various individuals for obtaining loans from them at a lower rate of interest.

(3.) THE assessee took the matter by way of further appeal before the Income-tax Appellate Tribunal. THE Tribunal endorsed the view of the Appellate Assistant Commissioner in regard to the extent and nature of the presumption contemplated under Section 132 (4A) as well as the applicability of the provision under Section 68. THE Tribunal observed that the presumption arising under Section 132(4A) was in the first place not irrebuttable, and, secondly, it extends only to the identity of the person making the entries or the correctness of the entries, etc. It, however, did not have the effect of excluding or overriding the application of Section 68 of the Act. It held that the ultimate burden to prove the genuineness of the cash credits in terms of Section 68 was on the assessee and that the same was not affected by Section 132(4A).