TMI Blog1985 (10) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the confirmatory letter from him and will file before you for which time may be allowed. On 13th Nov., 1980, the following narration was given by the firm in regard to the said deposit as under Ramesh Kumar Mehrotra is the younger brother of Shri Kamal Krishnan Mehrotra who is one of the partners in the firm Bharat Oxygen. Shri Kamal Krishna Mehrotra advanced ₹ 66,000 to us in cash on 20th Mar., 1975 and asked us to deposit the money in the name of his brother Ramesh Krishna Mehrotra. His full address is'Ramesh Krishna Mehrotra, C/o. Kamal Krishna Mehrotra, S/o. Shri Tej Krishna Mehrotra, Sondhi Tola (Near) Akhara Jwala Mast), Chauk, Lucknow. In our opinion both of them may be summoned under s. 131 and we are prepared to deposit their diet money. The ITO exercised a judicial discretion and in view of the aforesaid version only summoned Kamal Krishna Mehrota because the explanation of the assessee firm was that the money was deposited by Shri Kamal Krishna Mehrotra and on his behalf the name of his brother Shri Ramesh Krishna Mehrotra had been put. It was also clear that Shri Ramesh Krishna Mehrotra never came in contact with the firm and, therefore, Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee wanted to examine Shir Ramesh Krishna Mehrotra to justify the deposit of ₹ 66,000 which stood in his name in the account books of the assessee firm. But the ITO did not summon Shri Ramesh Krishna Mehrotra when requests were made before him to do so. It was also contended that the one was not correct and the CIT(A) also did not accept the request of the assessee when it was pleaded before him during the appeal. The ld. counsel for the assessee on these facts contended before us that it was incumbent on the part of the ITO to have resorted to the provisions of s. 131 by issuing summons to Shri Ramesh Krishna Mehrotra, the refusal to summon Shri Ramesh Krishna Mehrotra under s. 131 vitiated the addition of cash credits in the assessee's income as income from other sources. In support of his submission, the ld. counsel for the assessee placed reliance on the decisions in the case of Addl. CIT vs. Radhey Shyam Jagdish Prasad (1979) 9 CTR (All) 143 : (1979) 117 ITR 186 (All), Jhaver Bhai Biharilal Co. vs. CIT (1984) 43 CTR (Pat) 125 : (1985) 154 ITR 591 (Pat), Munnalal Murlidhar vs. CIT (1971) 79 ITR 540 (All). 6. On the contrary, the Departmental representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kamal Krishna Mehrotra was the material witness and he was summoned and examined. We fully, agree with the finding of the CIT (Appals) that Shri Ramesh Krishna Mehrotra never came in direct contact with the firm and as such there was no point is summoning him under s. 131 specially when he had not filed any confirmatory letter and as such his statement would not be helpful to the assessee in bringing out the compelling circumstances for making such deposit the immediate source of deposit by Shri Kamal Krishna Mehrotra and he was examined by the ITO. The failure to summon Shri Ramesh Krishna Mehrotra did not amount to a denial to let the assessee produce evidence and as such the assessment and the first appellate order cannot be vitiated on this ground. We, therefore, hold that the action of the authorities below was in accordance with law and no injustice had been done to the assessee in view of the facts of the case. 8. The ld. counsel for the assessee next contended before us that the CIT(A) was not justified in confirming the finding of the ITO whereby he treated the sum of ₹ 66,000 introduced in the books of the assessee as income from undisclosed sources under s. 68 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n., 1981 may be given. The ITO considered the entire statement of the assessee and came to the conclusion that the assessee and came to the conclusion that the initial onus to prove the deposit, i.e. identity of the party, its credit worthiness and the geniuses of the transaction had not been discharged. The ITO disbelieved the confirmatory letter in view of the fact that it did not contain complete details regarding the address etc. The ITO accordingly made the addition under s.68. On appeal before the CIT(A), it was contended that the ITO did not allow sufficient opportunity to the assessee to produce the detailed confirmatory letter of Shri Anand Kishore Agarwal and hence the principle of natural justice was violated by the ITO. On consideration of facts and circumstances of the case, the CIT(A) held that the assessee was allowed sufficient opportunity to produce evidence before the ITO but the assessee did not avail the opportunity and misused the process of the court for the reasons best known to him. The CIT(A) further observed that the cash credit entry in the name of Shri Anand Kishore Agarwal was not proved by the assessee and in absence of material facts it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore Agarwal. In reply, the authorised representative for the assessee contended that the amount in question was repaid after three years. However, he admitted that no interest was paid by the assessee firm during this period. 12. We have considered the submission of the parties and have gone through the material on record along with the paper-book filed by the assessee. The CIT(A) has rightly pointed out that the transaction in question was not a genuine one and the assessee failed to discharge the initial onus which lay on it. It was for the assessee to have filed the confirmatory letter or the affidavit of the creditor, namely, Shri Anand Kishore Agarwal alongwith his complete address. The assessee himself admitted at p. 18 that Shri Anand Kishore Agarwal was not traceable and even then he wanted the ITO to have examined him. This submission, to our mind, is of no help to the assessee because it was the bounded duty of the assessee to have produced the creditor before the ITO to prove the genuineness, credit worthiness and the identity of the party. In our opinion, the assessee is not justified in throwing onus on the shoulders of the ITO. The CIT(A), therefore, was justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Sitapur for re-filling and for that purpose Shri Subhash was engaged for transport work and he used vehicle Nos. UTD 6336 and UTD 7980. According to the authorised representative for the assessee, Shri Subhash was paid the transportation charges from time to time and some of his bills were adjusted to his account and the rest of the bills were prepared by actual accounting from the Gate pass and the Challan at the end of the year. It was also contended that the vouchers for the amount paid from time to time were duly signed by the recipient. On consideration of the submission of the assessee and after affording the evidence on record, the CIT(A) came to the conclusion that the appellant had not discharged the onus which lay on him by producing Shri Subhash, but in fact, the assessee neither filed any affidavit from Shri Subhash nor filed any other material to have established his identity. The CIT(A) has also pinted out certain defects in regard to the genuineness of the vouchers and he further doubted the correctness of signatures of Shri Subhash which are in Hindi and English version. The CIT(A) further pointed out that some of the challands were signed by Shri Subhash and som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further pointed out by the Departmental representative that it was the duty of the assessee to have produced Shri Subhash in respect of his contention. 15. We have considered the submission of the parties. The assessee from the very beginning took the consistent plea that Shri Subhash was engaged in transporting gas Cylinders from Lucknow to Sitapur to and for and he signed the excise challan and if he was not available the remaining challancs were signed by his driver. Therefore, material was placed before the ITO to prove the payment to Shri Subhash who was engaged as a transporter by the assessee-firm. I it is very much material to point out that the ITO did not doubt about the trips made by Shri Subhash to and from Lucknow to Sitapur, but he on the contrary doubted the payment made to Shri Subhash. In view of these facts, it was the best course for the ITO to have summoned Shri Subhash and have recorded his statement with a view to find out the correctness of the payment, but this was not done by the ITO. Therefore, the ITO was not at all justified in making the disallowance of ₹ 13,400 which was claimed by the assessee as expenditure on transportation of Gas Cylin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count were made in connection with the affairs of the firm. The CIT(A), therefore, disallowed the expenses claimed by the assessee in this regard. In this connection, it was also contended by the authorised representative for the assessee that the firm does not own a car, but in fact the partners had visited the factory premises time and again and for that purpose the assessee-firm had to use the cars of his friends and relatives of the partners and, therefore, the authorities below were not justified in disallowing the petrol expenses claimed by the assessee. 17. The Departmental representative contended before us that neither the owner of the car was produced nor affidavits were filed in support of their contention and even the registration number of cars had not been mentioned in the petrol bills. Therefore, it cannot be said by any stretch of imagination that the petrol expenses were incurred in that the petrol expenses were incurred in connection with the affairs of the firm. The Departmental representative in regard to the expenses of Shri U.S Halwasiya and Shri Pritam Goel contended that the assessee failed to file before the ITO reliable piece of evidence such as bills o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance of ₹ 2,400 out of establishment expenses. The assessee claimed before the ITO salary of driver ₹ 200 per month. The ITO disallowed the salary of driver on the ground that the firm did not own a car and added back the same in the income of the assessee-firm. The CIT(A) affirmed the action of the ITO on the ground that Nanhey driver had signed some of the excise challans mentioned earlier while dealing with the transportation charges. The Nanhey driver had already been paid salary for transportation charges. Therefore, the CIT(A) disallowed the claim of the assessee as the same went unsubstantiated. Shri R.K. Gulati, the counsel for the assessee contended before us that the firm used the cars of friends and relatives of the partners and a driver was needed, therefore, a petty amount of ₹ 200 was debited per month on account of payment of salary to Nanhey driver. Therefore, the authorities below were not justified in making the disallowance in this regard. 20. On the other hand, the Departmental representative contended before us that the assessee-firm did not own a car and furthermore the assessee failed to establish that the cars of relatives a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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