SETHI COTTON TRADERS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE appellant has approached this Court by way of filing the present appeals against a common order dt. 24th Feb., 2004 passed by the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred as 'the Tribunal') in ITA Nos. 173/Asr/1996 and 274/Asr/1998 for the asst. yrs. 1991 -92 and 1989 -90, raising the following substantial questions of law. For convenience, the facts are being taken from the order pertaining to the asst. yr. 1991 -92. (i) Whether, in the facts and circumstances of the case and the evidence placed on record, the finding that Sh. Surinder Kumar had no identifiable source of income out of which he could advance the loan of Rs. 50,000 is sustainable in law? (ii) Whether, in the facts and circumstances of the case, the provisions of Section 68 of IT Act, 1961 be invoked and it be held that the loans advanced by Surinder Kumar of Rs. 50,000 each in the relevant assessment years is to be treated as the income of the appellant ?

(2.) THE assessee in the present case is engaged in the business of commission agent and sale/purchase of pesticides and fertilizers. During the year, the assessee introduced a sum of Rs. 50,000 in the name of Sh. Surinder Kumar son of Sh. Suraj Bhan, resident of Bishanpura, Tehsil Abohar as a deposit. On consideration of the explanation offered by the assessee for the above referred cash credit, it was found as a fact by the AO that the alleged creditor was not in a capacity to deposit the loan with the assessee -firm and it was in fact an entry arranged by the assessee himself and routed through Sh. Surinder Kumar. It was further found that a sum of Rs. 50,000 was deposited in cash in the saving banks account of Sh. Surinder Kumar on 3rd Aug., 1990 and on the same day the cheque of the same amount was issued by Sh. Surinder Kumar in favour of the assessee. Keeping this fact in view, the amount of Rs. 50,000 shown as credit in the account of Sh. Surinder Kumar was treated as unexplained and addition to that effect was made under Section 68 of the IT Act, 1961 (hereinafter referred as 'the Act').

(3.) WE have heard Shri Avneesh Jhingan, advocate appearing for the appellant and with his assistance have gone through the orders passed by the authorities carefully.