TMI Blog1991 (4) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... nd before the Departmental authorities, but has taken the ground before the Tribunal. It was submitted that since the question of limitation goes to the root of the matter and does not require any investigation into fresh facts, the same may be admitted and adjudicated upon. Reliance in this regard was placed by the learned counsel on the Special Bench decision of the Tribunal in Indo Java Co. v. IAC [1989] 30 ITD 161 (Delhi) and of Calcutta High Court in CIT v.Soorajmull Nagarmull [1990] 185 ITR 421. 4. The learned Departmental Representative opposed the admission of the additional ground. 5. We have carefully considered the submissions, since the question of limitation raised by the assessee goes to the root of the matter and no fresh investigation into facts is called for, we would admit ground No. 3 taken for the first time before the Tribunal. We shall now deal with the merits of the ground taken. 6. The original assessment in this case was completed on31-3-1969on total income of Rs. 3,03,576. Appellate Assistant Commissioner of Income-tax, 'N'-Range, New Delhi, vide his order dated 10-2-1982 set aside the assessment and directed the assessing officer to make a fresh a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e limitation is applicable only to assessment year 1971-72 and subsequent assessment years. We may mention that sub-section (2A) of section 153 was inserted by the Taxation Laws (Amendment) Act, 1970 with effect from1-4-1971. The Central Board of Direct Taxes in the Explanatory note issued under Circular No. 56 dated 19-3-1971 clarified the position as under :-- "Under the existing provisions of section 153(3), such fresh assessments are not subject to any time limit. The time limit laid down under new sub-section (2A) of section 153 will be operative only in relation to assessments for the assessment year 1971-72 or any subsequent year." 9. In Kanga and Palkhivala's "The Law and Practice of Income-tax" 'Eighth Edition--Volume I' at page 1227 the distinguished authors have this to say regarding the applicability of sub-section (2A) :-- "In relation to assessment years up to and including the assessment year 1970-71, there is no time limit for making a fresh assessment under section 146 (now deleted) or in pursuance of an appellate or revisional order setting aside or cancelling an assessment. In relation to the assessment year 1971-72 and subsequent years, a fresh assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the Tribunal was not right in holding that section 153(2A) of the Act was not attracted in the instant case. It may be mentioned that the aforesaid decision of the Madhya Pradesh High Court is not an authority for the proposition that the provisions of sub-section (2A) of section 153 are attracted even in cases pertaining to assessment year 1970-71 and earlier years. The controversy in that case was confined to assessment years 1971 72 to 1974-75 and not to assessment year 1964-65 onwards as was submitted by the learned counsel for the assessee. Moreover, in the instant proceedings, we are not concerned with an order passed by the Departmental authorities in consequence of or to give effect to any direction or finding of the appellate authority in the proceedings relating to another assessment year. In the instant proceedings, the original order was passed on31-3-1969. The learned Appellate Assistant Commissioner had set aside the assessment on10-2-1972and the fresh assessment, after affording the opportunity to the assessee for cross-examining the creditor, has been made on30-12-1981. As no time limit was applicable in the instant case, the order passed by the assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d even during the detailed cross-examination that no genuine money/loan was advanced to the assessee ; (e) he also affirmed that the alleged transaction with the assessee-firm was not genuine ; (f) there is no evidence with the assessee, how such a huge alleged cash loan was received inDelhifromBombay. Similarly, there is no evidence or remittance of the interest in cash toBombayat various occasions. There is further no satisfactory explanation for not conducting big money transactions through bank when both the parties had bank accounts and were living and carrying on business far away from each other ; (g) the assessee has failed to prove that the alleged lender did, in fact, lend the said amount to him ; (h) the explanation of the assessee is most unreasonable ; (i) the alleged lender was operating his admitted nefarious activities from a small cabin taken on Leave and Licence basis atBombay; and (j) there was no bona fide transaction between the assessee and the alleged lender. " 13. On the basis of the directions of the Inspecting Assistant Commissioner, the assessing officer added back a sum of Rs. 1,00,000 and also disallowed the interest claim of Rs. 6,990 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,00,000 and the disallowance of interest thereon were properly made. 16. We have carefully considered the rival submissions and perused the material placed before us. In the case of Sukhanand Aggarwal in which the Tribunal passed the order on9-4-1973, the Tribunal had given a finding that the identity of the creditor and his creditworthiness stood established. The question of genuineness of transaction does not appear to have been gone into by the Tribunal. It may also be mentioned that in that case the creditor's accounts had also been examined and it was found that these tallied with the entries in the assessee's accounts. In the instant case, however, the books of the creditor were reported to have been lost in transit and the entries appearing in the books of the assessee had, therefore, not been tallied with the entries appearing in the books of the creditor. 17. TheCalcuttaHigh Court in Shankar Industries v. CIT [1978] 114 ITR 689 in its judgment dated21-3-1978had laid down three tests. These are the identity of the creditor, the capacity of the creditor to advance the money and the genuineness of the transaction. According to the Hon'ble High Court these things must be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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