COMMISSIONER OF INCOME TAX Vs. VIJAY AGRICULTURAL INDUSTRIES

JUDGEMENT

(1.) THE Tribunal, Allahabad has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court : "Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that only the amount of peak credit should be added as unexplained cash credit under s. 68 of the IT Act, 1961 -

(2.) THE reference relates to the asst. yr. 1979 -80. Briefly stated, the facts giving rise to the present reference are as follows : The respondent is being assessed to income -tax in the status of a registered firm. It is engaged in the manufacture and sale of agricultural implements and iron scrap, etc. For the assessment year in question, the AO had noticed certain cash credits in the squared up accounts. He required the assessee respondent to prove the genuineness of the deposits whereupon the respondent filed only confirmatory letters and did not produce any other evidence in support of the cash credits. It may be mentioned here that the AO had noticed the following cash credits in the squared up accounts of the various persons :

(3.) IT may be mentioned here that in respect of Sri Paras Ram Numberdar has made an addition of Rs. 2,000 treating the said amount to be the peak credit. In respect of Mahesh Chandra Jain, the addition was only Rs. 2,000 being peak credit. Feeling aggrieved, the respondent preferred an appeal before the AAC who has upheld the additions. Still feeling aggrieved, the respondent preferred a second appeal before the Tribunal. Before the Tribunal, the respondent had filed an application seeking permission to raise the following as additional ground of appeal : "That in view of the matter only the peak credits which works out to Rs. 7,200 only should have been considered for addition under s. 68 and not Rs. 22,300 as added by the ITO and confirmed by the AAC."