SOHAN LAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The Income-tax Appellate Tribunal has referred the following question arising out of its order dated October 26, 1983, in respect of the assessment year 1976-77 under Section 256(1) of the Income-tax Act, 1961 :

(2.) The Appellate Assistant Commissioner has taken into consideration the cash balance with reference to the three figures of Rs. 10,000, Rs. 20,000 and Rs. 5,000, which entries were made on May 7, 1975, May 10, 1975, and May 16, 1975, respectively. It was also found that Mohanlal carried on a havala entry business from the assessment years 1976-77 to 1978-79 and various parties to whom the amount is alleged to have been shown have surrendered the amount of entries. The names of some other parties have been given by the appellate authority and it was also taken as one of the grounds. It was also found that in respect of the assessment year 1977-78 notice under Section 148 of the Income-tax Act was issued to Bheru Nath Mohanlal and Co. The return showing Rs. 27,500 was filed which was assessed on February 27, 1980, declaring the income as "nil" on the ground that the income has already been taken in the hands of various debtors and as such it has been excluded to avoid double taxation. The Appellate Assistant Commissioner came to the conclusion that even if the debtors have accepted the debt as not genuine, Mohanlal should have continued to show it as his real income if it was the actual money given on interest by him. The conduct of the assessee falsified the subsequent statement on the basis of which the addition was upheld.

(3.) The matter was challenged before the Income-tax Appellate Tribunal in second appeal and it was found that there is no reason in support of the contention of the assessee that the statement dated May 22, 1978, was not reliable. This fact was also taken note of that there were other partners of the firm (other than Mohanlal) who were not produced by the assessee in support of his contention that the amount of Rs. 35,000 was really advanced by the firm to the assessee. The finding which was arrived at by the Appellate Assistant Commissioner was accordingly upheld and the appeal was dismissed.