ADDITIONAL COMMISSIONER OF INCOME TAX Vs. HANUMAN AGARWAL

JUDGEMENT

(1.) IN pursuance of this court's order dated November 8, 1978, the INcome-tax Appellate Tribunal, 'A' Bench, Patna, was directed to state the case and refer the following question of law for the opinion of this court :

(2.) THE assessee is a registered firm and derives income from jute. THE ITO found a credit of Rs. 41,500 in the name of M/s. Laxmi Narayan Atma Ram of 36, Indian Exchange Place (4th floor), Calcutta-1. THE assessee was called upon to explain the nature and source of the deposit. THE assessee filed a confirmatory letter stating the address and the G.I.R. number of the creditor. THE ITO, on information to the effect that the creditor had made a confession before the income-tax authorities at Bombay, where the head office of the creditor is situated, that the loans and advances and other transactions recorded in their books at their head office at Bombay and at the branch office at Calcutta were not genuine, came to the conclusion that the transactions were not genuine and, accordingly, added Rs. 41,500 and disallowed interest thereon. THE order of the ITO is marked annexure 'A' to the statement of case.

(3.) IT is desirable to mention here that, in the ends of justice, we directed the learned senior standing counsel for the Department to produce the original records before us so that we could find out the true nature of the confession made by the Bombay party in a third party case. The learned senior standing counsel, despite his efforts, was not able to produce the so-called confessional statement before us, though other papers on the record were there. Thus, the position remains that the confession was never made available either to the assessee or to the Tribunal or to us.