TMI Blog1992 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 19th Aug., 1981 as loan in the name of one Shri R.K. Nanda, Coimbatore. A sum of Rs. 24,750 has been debited as interest on the loan of Rs. 2,25,000 during the previous year relevant to the assessment year under consideration. The assessee was asked to explain the genuineness of the transaction. The assessee filed a letter dt. 1st Dec., 1985 obtained from the creditor which reads as follows: "I, R.K. Nanda, son of H.L. Nanda at present residing at 85, S.R.P. Nagar, Coimbatore-11 do hereby confirm that I have advanced the following amounts as loan to M/s G.G. Films, Calicut on the following dates: 19th Aug., 1981 To amount sent by Draft No. 256495 on Syndicate Bank (Main Br.), Coimbatore Rs. 1,30,000 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance for examination on 17th Feb., 1985 in the income-tax office, Coimbatore. The assessee was also requested to appear on that day. But, the alleged creditor did not turn up. Instead Shri Hariharan, C.A., appeared in the Camp office at Coimbatore and stated that he met the creditor in the morning and the creditor was not prepared to appear before the ITO. Hence, the Assessing Officer held that the assessee did not furnish any material to prove the genuineness of the loan credit and the credit-worthiness of the creditor. 3. According to the assessee, the creditor Shri R.K. Nanda was assessed to income-tax and wealth-tax. It was also brought to the notice of the Assessing Officer that the creditor was a partner in the following three fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Since, he found that the alleged loan is a bogus one, he treated the sum of Rs. 2,25,000 as income of the assessee from undisclosed sources. The claim for interest payment of Rs. 24,750 was also disallowed. 4. The assessee went in appeal to the CIT(A), Calicut, who confirmed the view of the Assessing Officer. Hence, the assessee is in further appeal before us. 5. We have heard the parties to the dispute. The assessee has also produced the following document: (i) Account copy of Shri R.K. Nanda in the books of G.G. Films; (ii) Wealth-tax return of Shri R.K. Nanda for the asst. yrs. 1981-82 1982-83; (iii) Current account of the assessee with Vysya Bank Ltd. In our considered view, the appeal of the assessee should succe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave compelled his attendance especially when the summons was served on the creditor and the creditor had declined to appear before him. This has not been done in this case. In support of this view, we have got a Supreme Court decision in the case of CIT vs. Orissa Corporation P. Ltd. (1986) 52 CTR (SC) 138 : (1986) 159 ITR 78 (SC), wherein it is held as follows: "In this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under s. 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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