COMMISSIONER OF INCOME TAX Vs. SETHI TEXTILES

JUDGEMENT

(1.) THIS is an application for calling for a reference from the Appellate Tribunal under Section 256{2) of the Income-tax Act, 1961 (for short " the Act ").

(2.) BRIEFLY stated, the facts are that in the case of the non-applicant assessee, for the assessment year 1979-80, addition of Rs. 30,000 in respect of cash credits of Rs. 10,000 in the names of each of the three persons named by him was made and disallowance of Rs. 2,572 relating to interest paid on those cash credits was also made. These findings were confirmed up to the stage of the Tribunal. The Income-tax Officer initiated penalty proceedings under Section 271(1)(c) of the Act treating the said addition and disallowance as concealment of income and consequently levied a penalty of Rs. 17,500 on the assessee. This order of levy of penalty was cancelled by the Commissioner of Income-tax (Appeals). The Tribunal endorsed the order of the Commissioner of Income-tax (Appeals) in appeal.

(3.) LEARNED counsel for the Department submits that, in the present case, the assessee offered evidence merely of the " capacity " of the creditor to advance the loan when he should have offered evidence also of " actual advance ".