COMMISSIONER OF INCOME TAX Vs. R S RATHORE

JUDGEMENT

(1.) THE following question of law has been referred by the Tribunal, Jaipur Bench, Jaipur, in respect of the asst. yrs. 1974-75 and 1976-77 under s. 256(1) of the IT Act, 1961 :

(2.) THE brief facts of the case are that certain investments were made by the assessee in the name of his wife Champa Devi and himself and also his daughter, Sumitra Devi, in a company known as Madhuvan Chemicals & Fertilisers (P.) Ltd., Udaipur. THE returns in respect of six years were filed. THE ITO asked the assessee to explain the source of acquisition in respect of these investments and it was explained that the money had been borrowed from various transporters. THE creditors were asked to be produced and some of them were produced. THE ITO found that the addresses of the creditors had not been given and only the truck numbers have been given. THE transporters are all outsiders and the amounts have been advanced in cash. THE exact date of the advance of loan or its return have not been given. Neither was any security taken by the creditors nor were any documents produced in proof of the loan itself. THE creditors have not explained the source of investment and since they were all living at a distant place and were not engaged in the business of moneylending and were only transporters, the investments by the assessee, wife and daughter were considered as unexplained investment.

(3.) THE reference is answered in favour of the Revenue and against the assessee and the matter is remitted back to the Tribunal to consider each individual investment for which an explanation has been given. If the Tribunal is satisfied with the explanation submitted by the assessee, then the investment to that extent has to be allowed and the entire sum cannot be allowed in general. No order as to costs.