SHANKAR INDUSTRIES Vs. COMMISSIONER OF INCOME TAX CENTRAL

JUDGEMENT

(1.) This reference has been initiated by Messrs. Shankar Industries, Calcutta, the assessee, at whose instance this court, under Section 256(2) of the Income-tax Act, 1961, has directed the Tribunal to draw up a statement of case and refer the following question :

(2.) The facts found and/or admitted are, inter alia, that in the assessment year 1963-64, the previous year being the samvat year 2019, ending on the 1st April, 1963, a number of cash credits were noticed in the books of account of the assessee in the names of various parties, including those of Sureka Jute Co., Ram Kumar Chatoria, and Chouthmull Raghulall. In pursuance of a summons issued by the Income-tax Officer, one Vidyanand Sureka appeared before the Income-tax Officer on the llth December, 1967, on behalf of Sureka Jute Co. He claimed to be the proprietor of the concern and stated that his books had been seized by the income-tax department on the 17th November, 19'65. It was ascertained from departmental records that the said Vidyanand Sureka had made a confession on the 9th September, 1966, to the effect that his loan transactions were not genuine and that he was only a name-lender. It was also noted that in the books of account of Sureka Jute Co., the sources of payments made by third parties were not ascertainable as the entire debit side of the cash book was kept blank and no dates were given.

(3.) No one appeared on behalf of Ram Kumar Chotaria in spite of summons issued. On examination of the income-tax file of the said party it was found that the firm had been closed after the death, of the proprietor, Ram Kumar Chotaria, and in the assessment year in question it had not filed profit and loss account or balance-sheet and that its assessment had been completed under Section 144 of the Income-tax Act, 1961. The previous assessment of the firm for the assessment year 1962-63 had also been completed under Section 144 and the income assessed was only Rs. 2,000. It was also found that a similar loan of Rs. 65,000 alleged to have been advanced by Ram Kumar Chotaria to another concern had been held to be spurious.