JAINARAIN JEEVRAJ Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application made by the assessee, M/s. Jainarain Jeevraj, under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), praying for issuing a direction to the Tribunal to refer the questions mentioned in the application to this court for its answer.

(2.) THIS matter relates to the assessment year 1964-65. At the time of the assessment of the petitioner-firm, the ITO added Rs. 36,000 as an income from undisclosed sources. Against that assessment order an appeal was preferred before the AAC and there the assessee tried to explain that the entry made on September 14, 1962, depositing Rs. 36,000 in the cash book was a bogus entry, because it was made by a "munim" without having the knowledge of certain facts. According to the assessee, on September 11, 1962, an amount of Rs. 36.000 was withdrawn from the current account of the bank, but the same amount was deposited in a fixed deposit for one month. THIS fact was not in the knowledge of his "munim" and, therefore, a bogus entry was made in the cash book of the firm in the following terms:

(3.) WE have carefully perused the order passed by the AAC and that of the Tribunal. During the examination of the account books by the ITO a question arose that if the entry of Rs. 36,000 made on September 14, 1962, was bogus, then how could the assessee-firm make payments when it had no adequate cash in hand to pay off its liability. This question was tried to be explained by the assessee by saying that the assessee-firm received a rental income from the building and it was out of that amount that the payment was made. It may be mentioned that that amount was not entered in the account books of the petitioner-firm and, therefore, the ITO did not accept the explanation given by the assessee. Regarding the fact as to how the cash balance could tally, the explanation given by the assessee-firm was that there are two entries in the account books, one made on January 11, 1963, for Rs. 20,000 and another made on July 31, 1963, for Rs. 16,088.77 which counter-balanced the effect of the alleged bogus entry made by the "munim" on September 14, 1962, but this explanation was also rejected by the ITO. However, both these explanations found favour with the AAC and the appeal of the petitioner-firm was accepted by him. When the account books came for scrutiny by the Income-tax Appellate Tribunal the petitioner-firm did not care to bring this fact to the notice of the Tribunal, because on the day when the account books were examined the representative of the petitioner-firm was absent and, unless properly explained by the assessee, these two entries could not be said to be the entries counterbalancing the alleged bogus entry of Rs. 36,000 made on September 14, 1962. Moreover, there was a consent made by the assessee before the Tribunal that whatever finding of fact would be given by the Tribunal it would be accepted by it and it was perhaps on account of that consent that no care was taken by the assessee to be present before the Tribunal when the account books were examined by it. In these facts and circumstances, it is difficult for us to accept the contention of the assessee that the Tribunal ignored or did not take into consideration the facts which it ought to have considered. On the contrary, it was the duty of the assessee to bring all these facts to the knowledge of the Tribunal so that the Tribunal could enable itself to declare the entry of September 14, 1962, as bogus. But no such care was taken. It may also be mentioned here that, in view of the stand taken in the beginning by the assessee that it tried to prove the entry of September 14, 1962, as genuine before the AAC, the burden lay very heavily on it to prove that it was really a bogus entry. At this stage, it is not open to the assessee-firm to say that the Tribunal did not take into consideration the entries of Rs. 20,000 and of Rs. 16,088.77 as counterbalancing the entry of Rs. 36,000, because it was never explained to the Tribunal by anybody on behalf of the assessee in that manner. In these circumstances, it is not open to the assessee now to assert that all the facts were not carefully taken into consideration by the Tribunal. In these circumstances, we do not feel convinced by the argument advanced by the learned counsel for the assessee that any question of law is involved in this case.