COMMISSIONER OF INCOME TAX Vs. KUMAR MAAINI

JUDGEMENT

(1.) THE Revenue has filed this appeal under Section 260A of the Income-tax Act, 1961 (for short, "the Act"), for determination of what it has described as substantial questions of law. For the sake of reference, the questions framed by the Revenue are reproduced below :

(2.) THE late Shri Parshotam Lal (hereinafter described as "the assessee") was engaged in the business of manufacture of bricks and sale thereof under the name and style of Tirath Ram Naresh Kumar. He owned two brick kilns in village Sagaran, Tehsil Dasuya, District Hoshiarpur. For the assessment year 1991-92, the assessee filed a return on July 23, 1992, declaring an income of Rs. 86,790. THE Assessing Officer completed the assessment under Section 143(3) of the Act at a total income of Rs. 2,52,472 plus agricultural income amounting to Rs. 1,23,220. Vide order dated August 10, 1992, he made addition of Rs. 1,44,429. Subsequently, he initiated proceedings under Section 148 read with Section 147 of the Act on the ground that the assessee had not accounted for coal measuring 315.970 m.t. valued at Rs. 4,98,342 which it had purchased in the name of Tirath Ram Naresh Kumar from Jeet Singh, proprietor of Modern Coal Company, Jalandhar. He also issued notice under Section 131 of the Act to Jeet Singh, who is said to have admitted the sale of coal to the assesses, but at the same time, stated that no payment had been received by him during the accounting year 1990-91. THEreafter, vide order dated March 29, 1996, the Assessing Officer made further addition of Rs. 1,88,480 in the income of the assessee.

(3.) DRN. L. Sharda argued that the reasons assigned by the Tribunal for upsetting the orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals) are legally unsustainable and, therefore, order dated March 15, 2002, may be set aside. He submitted that the statement made by Jeet Singh under Section 131 could be used by the Assessing Officer for determining the liability of the assessee in respect of the coal purchased in the name of Tirath Ram Naresh Kumar and the Tribunal committed a serious illegality by refusing to rely on his statement. Dr. Sharda pointed out that the assessee had not challenged the genuineness of the signatures appearing on the sale bills produced by Jeet Singh and the Tribunal committed a serious error by discarding the same. He then argued that non-payment of the price by the assessee cannot be made a ground for doubting the correctness of the additions made by the Assessing Officer.