9911796707
TMI Blog1976 (7) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically stated that he has never deposited any amount with Agarwal Bros., Sriganganagar and he does not have any account with the above concern. The assessee was therefore, given a specific opportunity vide letter dated the 30th Nov., 1973 to explain why the amount of Rs. 15,000 credited in the name of Shri Gitton Singh to be not added back in the income of the firm as income from undisclosed sources. The assessee vide his reply dt. 5th Dec., 1973 has shown his inability to produce any evidence in support of the above credit. He has also shown his inability to produce Shri Gitton Singh on the plea that he is an indoor patient. In paragraph (iv) of his reply the assessee has however offered to surrender the above amount provided no penalty action is taken against him. The conditional officer of surrender of the amount on the part of the assessee is absolutely irrelevant as the same has come only when he has been completely tight corner and also knew that has no evidence for the above cash deposit which income represents his own income from the undisclosed sources. The amount of Rs. 15,000 is, therefore, added back in the income of the assessee as income from undisclosed sources ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the learned AAC was wrong in not admitting he additional evidence which the assessee wanted to file. According to the learned counsel the additional evidence which the assessee wanted to file was very material for the purpose of deciding the point in controversy. It was further contended that the ITO on 13th Nov., 1973 issued a letter requiring the assessee to reply the same by 5th Dec., 1973. The letter sent by the ITO was received by the ITO was received by the assessee on 1st Dec., 1973 an accordingly on 5th Dec., 1973 the assessee informed the ITO that Shri Gitton Singh did advance the loan. He was on the relevant date an indoor patient of T.B. at Amritsar Hospital and as such he could not be produced. It was further contended that on 5th Dec., 1973, the learned ITO never informed the assessee that the offer given by the assessee was not acceptable to him. According to the learned counsel the statement on which the ITO relied was not recorded in the presence of the assessee and as such unless the assessee was given opportunity to cross-examine Shri Gitton Singh on the statement, that statement could not be read against the assessee. On the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans. The copy of the statement of Shri Gitton Singh in the books of assessee firm was current which began from the asst. yr. 1969-70. The copy of the account was also filed before us. On the basis of this copy of account the learned counsel wanted to show that the deposit with the assessee firm was not made for the first time in the year of account but the assessee has been depositing huge amounts which the assessee firm from time to time and also has been withdrawing money from the said firm from time to time. It was further contended that the copy of the account of Shri Gitton Singh in the books of assessee for the year ending 31st March, 1973 showed that on 1st April, 1972 there was credit of Rs. 7,000 in the account of Shri Gitton Singh in the books of the assessee firm. On 31st Oct., 1972 Shri Gitton Singh deposited Rs. 15,000 with the assessee and on 4th March, 1973 the payment given to Shri Gitton Singh by means of a cheque No. 006539. The copy of the account is on the paper book. Thus it was submitted that Shri Gitton Singh had means to advance the amount in question. If the assessee was given proper opportunity to produce Shri Gitton Singh before the ITO, there would be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to offer and the total amount of Rs. 18,000 will be added back in your income as income from undisclosed sources." Reply-- "We enclose an affidavit of Shri Davinder Kumar Bahal who is an existing assessee with ITO, D-Ward, Sriganganagar. 2. We are surprised to see the statement of Shri Gitton Singh. Shri Gitton Singh has advanced the amount to us as shown in our accounts books. 3. We are unable to produce Shri Gitton Singh as he is an indoor patient of T.B. at Amritsar Hospital. 4. However, to facilitate our income tax proceedings, we are prepared to surrender the above amount provided no penal action is taken against us." On the basis of the letter dt. 30th Nov., 1973 which was received by the assessee on 1st Dec., 1973 the ITO gave opportunity to the assessee to produce evidence in support of the genuineness of the deposit in the name of Shri Gitton Singh and Shri Devendra Kumar. The ITO also sent a copy of the statement of Shri Gitton Singh, which was recorded behind the back of the assessee. According to the letter dt. 30th Nov., 1973 the assessee was informed that form the statement it was clear that the deposit in the name of Shri Gitton Singh was not genuine. The ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itton Singh. It was asserted by the assessee that Shri Gitton Singh did advance the amount as is clear from the documents. It was also submitted in the letter dt. 5th Dec., 1973, that in order to facilitate the income-tax proceedings, the assessee is prepared to surrender the said amount provided no penal action taken against is the assessee. The proposal of the assessee was not accepted by the Department. On 5th Dec., 1973 the ITO never brought to the notice of the assessee that the offer of the assessee was not acceptable to him. Under these circumstances, the ITO made the addition of Rs. 15,000 as income of the assessee from undisclosed sources. In our opinion, this finding of the learned ITO is inherently illegal. The learned ITO relied on the statement of Shri Gitton Singh which was recorded behind the back of the assessee and on that statement the learned ITO gave no opportunity to the assessee to cross-examine the same. If the learned ITO made the addition without considering that statement, there could be no grievance to the assessee. Thus the order of the lender ITO making the addition is bad in law. Moreover, as discussed above, the assessee was not given sufficient oppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter on the basis of facts which have been canvassed before the ITO and the AAC, on which a finding may have been recorded by either the ITO or the AAC, but which finding has not become necessary for the determination of the assessment because a particular view of the assessee's liability was taken in the assessment proceedings, which view the Tribunal dissents from; or the same position is reached where the Tribunal may accept that view, but upon a reference the view is held to be not justified by the High Court." We have discussed in detail as stated above that in the present case the ITO did not given reasonable opportunity of being heard to the assessee before making addition of Rs. 15,000. Similarly, on the facts as discussed above, the assessee was prevented by sufficient causes to produce evidence before the ITO on 5th Dec., 1973 including the Statement of Shri Gitton Singh. As discussed above, the ITO never gave opportunity to the assessee to cross-examine Shri Gitton Singh after 5th Dec., 1973. As a matter of fact under no circumstances the assessee was able to produce Shri Gitton Singh on 5th Dec., 1973 because on that date he was an indoor patient of T.B. at Amritsa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property state, and to fill in gaps of course the position is different when the appellant Court itself requires certain evidence to be adduced in order to enable it to do justice between the parties". From the copy of the account of Shri Gitton Singh in the books of the assessee for the year ending 31st March, 1973 it is clear that on 1st April, 1972 there was credit balance of Rs. 7,000 in the account of one Shri Gitton Singh in the books of the assessee. From the coy of the account, it is clear that Rs. 15,000 was advanced by Shri Gitton Singh on 31st Oct., 1972 by cash and the repayment was made on 4th March, 1973 by means of a cheque No. 006539. The copy of the account of the Shri Gitton Singh commencing from the asst. yrs. 1969-70 to 1973-74 is on the paper book. From this account it is clear that Shri Gitton Singh had current account with the assessee all along. The statement of Gitton Singh had current account with the assessee all along. The statement of Gitton Singh was also recorded by the ITO on 21st April, 1970, the copy of which is on the paper book. From it is clear that Shri Gitton Singh was having means to advance the loan. 12. Looking to the aforesaid facts, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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