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TMI Blog1977 (2) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... is year was completed on 8th March, 1967 on a total income of Rs. 10,20,524 including a sum of Rs. 9,00,000 being cash credit appearing in the books of the assessee on the names of twelve parties treated as the assessee's income from undisclosed source. On appeal, the Tribunal by their order dated 18th Dec., 1970 found the credits in the name of five parties amounting to Rs. 4,35,000 as genuine and deleted those additions. Regarding the balance of Rs. 4,65,000 in the name of seven parties, the Tribunal found that those additions also could not be sustained but set aside the matter to be looked into afresh by the Income-tax Officer with the following direction:— "If the Income-tax Officer wants to use the confession against the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's income from undisclosed sources and assessed the same as such. As a consequence, he also disallowed brokerage of Rs. 1,398 and interest of Rs. 46,774 on the above loans. 4. The assessee appealed to the Appellate Assistant Commissioner and challenged the action of the Income-tax Officer. The Appellate Assistant Commissioner asked the assessee to state the current address of the creditors but the assessee expressed its inability to do so. Then, the Appellate Asstt. Commissioner observed that the Income-tax Officer could not produce the creditors for being cross examined by the assessee. He was of the opinion that the assessee who had transactions with the creditors in the past was in a position to furnish their current addresses and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee lost all contact with them after the transactions were over long ago. On the contrary, the broker through whom the loans were arranged appeared before the Income-tax Officer had admitted to have arranged the loans for the assessee. In view of the above the Tribunal directed that if the confessions were to be used against the assessee, then the Income-tax Officer who obtained the confessions from the creditors after the assessee ceased to have any contacts with them should, in full fairness, produce them to be cross examined by the Income-tax Officer, otherwise, the Income-tax Officer is directed to accept the loans as genuine. He pointed out that the aforesaid order of the Tribunal has become final within the meaning of s. 254 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer had no other alternative but to proceed afresh to reconsider the credits. According to him, the direction of the Tribunal meant that if the creditors could not be produced, the Income-tax Officer has to reconsider the credits afresh according to law and not to accept the credits as genuine straight-way. He contended that the onus of proving the cash credits to the satisfaction of the Income-tax Officer was on the assessee who has not discharged the onus. To a query put by us, he answered that there was no confession of any creditor on the record but other Income-tax Officers who assessed the creditors obtained the confessions and the present Income-tax Officer came to know of the same from enquiries from them. He pointed to the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly given effect to and their direction has been followed both in letter and in spirit. On reading the order dated 18th Dec., 1970 as a whole we find that the Tribunal directed the Income-tax Officer to produce the creditors vis a vis their alleged confessions or, in the alternative, accept the cash credits as genuine. We do not find that any third course was open to the Income-tax Officer and consequently, the action of the ITO. to reconsider the cash credit decision novo without relying on the confessions was, in our opinion, not in accordance with the clear direction of the Tribunal. When the Department accepted the aforesaid order of the Tribunal it was not open to the Income-tax Officer to disregard the direction therein and it was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of long years. It further said that the Income-tax records did not show any loans to the assessee but that fact does not prove that loans obtained by the assessee were not genuine specially when the creditors have been assessed on income from money-lending business although on estimate in the absence of regular books of accounts. The letter further advised that the broker who arranged the loans be summoned and examined which has been done. Further, in the earlier assessment year 1961-62, four of the seven creditors, under similar circumstances, have been accepted by the Tribunal as genuine (vide heir order dated 12th Feb., 1975 to which one of us was a party). Even the other three creditors have been found to be doing genuine money lendin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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