COMMISSIONER OF INCOME-TAX Vs. SALEK CHAND AGARWAL

JUDGEMENT

(1.) THE present income -tax appeal under Section 260A of the Income -tax Act, 1961, hereinafter referred to as 'the Act', has been admitted, vide order dated September 7, 2006, on the following substantial question of law: Whether, on the facts and in the circumstances of the case, the learned Income -tax Appellate Tribunal was legally justified in deleting the addition of Rs. 2,20,000 made on account of unexplained transaction found in the books of M/s. Kanhaiyalal Om Prakash, whereas the explanation given by the assessee that M/s. Kanhaiyalal Om Prakash has surrendered this amount was found baseless, hence which remained unexplained

(2.) THE appeal relates to the assessment year 1976 -77. The search was conducted on the business premises of one M/s. Kan -haiya Lal Om Prakash and Baldev Prasad of Muzaffarnagar in which certain books of account and other documents were seized. In the books of account there were credit entries of Rs. 2,20,000 standing in the name of the respondent -assessee. On being asked to explain the nature and the source of investment so made with the aforesaid firm, the respondent -assessee denied to have made any such investment or having given any advance to the said firm. The assessing authority was not satisfied with the statement of the respondent -assessee and accordingly made an addition of the said amount which was affirmed in appeal by the Commissioner of Income -tax (Appeals). On further appeal by the assessee, the Tribunal has deleted the addition on the ground that there was no material on record which may either establish or indicate that the amount of Rs. 2,20,000 was deposited by the respondent -assessee.

(3.) IN view of the foregoing discussion, the substantial question is, therefore, answered in favour of the assessee and against the Revenue. Consequently, the appeal fails and is dismissed.