M D JEWELLERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated May 14, 1981, in respect of the assessment year 1971-72 under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE brief facts of the case are that the assessment of the assessee was completed on December 22, 1973. In the said assessment, a cash credit of Rs. 20,000 appearing in the name of Shri Raoveer Vikram Singh was found. THE said amount was not disclosed in the assessment year at all. Later on, the Income-tax Officer discovered from the statement of Shri Raoveer Vikram Singh that the cash credit of Rs. 20,000 was not genuine and, therefore, he was of the view that the income represented by the cash credit and interest claimed thereon by the assessee escaped assessment. THE Income-tax Officer, therefore, initiated proceedings under Section 147(a) read with Section 148 of the Act. THE notices were issued on July 24, 1975, and were served on August 7, 1975. THE Income-tax Officer gave opportunity to cross-examine the alleged creditor who deposed on oath that he had not advanced Rs. 20,000 to the assessee but it was only a hawala entry.

(3.) IT has also been held that (at page 477) :