COMMISSIONER OF INCOME TAX Vs. RAMESWAR SIRKAR

JUDGEMENT

(1.) IN this reference under s. 256(2) of the IT Act, 1961 ('the Act') for the asst. yr. 1985-86 the following question has been referred to this Court:

(2.) THE facts, briefly stated, are that in the capital account of the assessee there was a sum of Rs. 8,99,086 shown as addition thereto. The assessee explained that the amount was introduced in the capital account out of the proceeds of the fixed deposits. The assessee was not able to produce the fixed deposit receipts before the ITO for verification. Therefore, the ITO held that the source of the addition in the capital account was not explained and proceeded to assess the amount as cash credit under s. 68 of the Act. On appeal, the assessee produced the fixed deposit receipts before the CIT (A). The balance sheet was also produced before him. The assessee also pointed out the transfer entries made in respect of the said amount from his personal account to his business account. The personal account had been considered in the wealth-tax assessment of the assessee. After going through the assessment records and the material produced by the assessee, the CIT (A) found that the amount of Rs. 8,99,086 had in fact been transferred to the capital account from the assessee's personal account. He, therefore, deleted the addition. On appeal by the Department, the Tribunal agreed with the findings of the CIT (A) and dismissed the ground.

(3.) THE learned counsel appearing for the Revenue has drawn our attention to the order of the ITO and submitted that the finding was based on sufficient materials and the assessee did not in spite of several particulars given satisfactorily explain the source of the capital account or the advances received from various parties. Accordingly, the CIT (A) and the Tribunal were not justified in deleting the addition made by the ITO. He has drawn our attention to the findings of the different authorities.