TMI Blog1997 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs.18,000 was added to the assessee's income under section 68 of the Act and the same time adding Rs.1828 interest payable by the assessee in respect of said loan amount. On first appeal it was confirmed on the ground that the assessee has failed to discharge the onus which lay on it under section 68 of the Act. 4. We have heard both sides, and also perused the relevant documents placed by the assessee's counsel in his paper book. In our view, though there was no confirmatory letter from the assessee, the assessee tried to explain how that lady came into possession of Rs.18,000 which was by loans obtained from two different parties who were Income-tax assessees and who filed explanation in support of the explanation given by the assessee. The loans by the two persons to the lady, Smt. Girija Devi were through account payee cheques and the lady Smt. Girija Devi also gave loans to the assessee by account payee cheques. In our view it can be safely said that the assessee discharged the onus which lay on him under section 68 of the Act. The Hon'ble Patna High Court in the case of Addl CIT v. Bahri Bros. (P.) Ltd 154 ITR 244 have laid down that if the loan transaction is routed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence in closing stock. The A.O. has stated in his assessment order that in the course of search operations silver account register for the period relevant to the assessment year 1983-84 was seized according to which the closing stock of the assessee's business amounted to 39.406 kgs. as against 29.065 recorded in the trading account filed along with the return of income. The A.O., therefore, added the value of the difference of 10.295 kgs. as no satisfactory explanation was tendered by the assessee. This addition was made as income from other sources. In first appeal it was stated that the difference in closing stock related to assessment year 1982-83 and the value in respect of the difference was added in that year. The A/C stated in para 13 of the impugned order that he found from the record that the amount of unexplained closing stock of silver was considered at 10.786 kgs. in the assessment year 1982-83 since the closing stock as per the seized stock register amounted to 41.882 kgs. whereas 31.069 kgs. was shown in the trading account and, therefore, the A.O. added Rs.22,864 as income from other sources for the assessment year 1982-83. For the assessment year 1983-84 the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not justified in setting the items of cash credits of Rs.69,000, interest of Rs.6,891 and investment of Rs.4,00,000 in the purchase of house by the assessee since reasons were specifically mentioned by the Assessing Officer while making the addition of these items. For that the ld. Commissioner of Income-tax (Appeals) was further not justified in deleting the additions of Rs.6,047 under section 40A(3), Rs.14,000 on low drawing and Rs.1,02,329 on A/c of materials gathered from loose papers available from assessee's premises. The additions were maintainable." 14. In respect of first ground, we are of the opinion, after hearing both sides that the A/C was not wrong in setting aside the assessment and remanding the matter for fresh investigation in respect of cash credits of Rs.69,000 and the interest thereon amounting to Rs.6,891. We also do not wish to find fault with the A/C in remanding the matter to the A.O. with a direction to re-examine the matter regarding the purchase of a house property of Rs.4,00,000 claimed by the assessee to have been purchased by his family members and for which proper evidence was not appreciated by the A.O. in a right and proper perspective. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name of Smt. Girija Devi, which was added to the assessee's income, and disallowance of interest amounting to Rs.1,828 paid to her on the loan. I, therefore, with respect, propose a separate order in respect of the above. 21. According to the assessment order, the assessee showed loan of Rs.18,000 from Smt. Girija Devi in his books of account. The assessee was asked to do the following by a letter dated 26-11-1985: (1) establish the identity of the cash credit, (2) prove the capacity of the creditor to advance the loan, (3) adduce evidence regarding the genuineness of the loan transaction. The assessee was also required to produce the cash creditor for examining her in the office. 22. The reply was received from the assessee saying that Smt. Girija Devi had furnished confirmatory letter regarding deposit of Rs.18,000 with the sources. However, it is stated in the assessment order that no confirmatory letter was filed. Nothing whatsoever had been stated by her regarding the source of the amount in the reply mentioned above. However, subsequently during the assessment proceeding, two letters were filed one was a letter from one Shri Onkar Nath, who stated that he advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys down certain conditions for admission of additional evidence and also obliges the CIT (Appeals) to record the reasons for admission of the additional evidence. It is quite clear that the CIT(Appeals) did not admit the additional evidence, though he has not specifically said so. This conclusion is evident since he has made no observation on the submission regarding payment by cheque before him and has not recorded any reason for admission of additional evidence. In the facts and circumstances of the case, when no case was made out by the assessee for production of additional evidence, I agree with the CIT-(Appeals) that it could not have been admitted. 28. Similarly additional evidence is not admissible before the Tribunal, where even a letter, claiming to be a confirmatory letter from Smt. Girija Devi, has been filed. I, therefore, decline to consider it, including photocopy stated to be of bank A/c of Smt. Girija Devi. This is particularly so since no reason has been advanced before us for producing the additional evidence and also because no opportunity has been allowed to the department to rebut it. 29. In the above circumstances, the case of Bahri Bros. (P.) Ltd, relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to one of the grounds involved for assessment year 1983-84, there was difference of opinion between the Members of the Division Bench and hence the differing point is referred to the Third Member for his opinion, which is as follows: "Whether, on the facts and circumstances of the case and in law addition of cash credit of Rs.18,000 under section 68 of the Act and disallowance of payment of interest of Rs.1,828 on the cash credit should be upheld or deleted?" I went through the differing orders of the Members and I felt that the main question to be decided by me would be the admissibility of the additional evidence which was produced by the assessee before the Tribunal. 2. One Smt. Girija Devi was the cash creditor. The case of the assessee was that she had deposited an amount of Rs.18,000 on 3-9-1982 in the books of account of the assessee. Smt. Girija Devi advanced this loan by means of a cheque No. 0021927 dated 3-9-1982. Out of Rs.18,000 thus deposited by Smt. Girija Devi, a sum of Rs.8,000 was received as loan by her from Shri Onkar Nath, Advocate, and a sum of Rs.10,000 from Smt. Dayawanti Devi. Shri Onkar Nath, Advocate, is an assessee with Permanent A/c No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. The ld. CIT(Appeals) did not make any comment on the fresh explanations filed before him or advanced before him except recording them in his impugned order. By simply observing that the assessee did not furnish any confirmation from the creditor and also by observing that the assessee failed to produce the cash creditor for examination, he confirmed the addition of Rs.18,000 and disallowed the interest of Rs.1,828 thereon. 4. When the matter was brought to the Tribunal in second appeal, written submissions were filed on behalf of the assessee. In those submission, inter alia, it was submitted that Smt. Girija Devi advanced the sum of Rs.18,000 by cheque No. 0021927 dated 3-9-1982 drawn on Bank of India, Gaya. She was an identifiable and genuine person and the sources were fully explained and could be verified from scrutiny of her Bank Account. A copy of her Bank Account was also furnished in the paper book. A confirmatory letter purported to have been given by Smt. Girija Devi was also furnished in the paper book. 5. In the order of the learned Accountant Member, Shri V.K. Sinha, it is stated that in the opinion of the learned Accountant Member it is the evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence which is relevant to any ground of appeal; or (4) That the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. In all such cases, additional evidence can be produced before a first appellate authority. While admitting that additional evidence, the appellate authority should allow a reasonable opportunity to the Assessing Officer to examine the evidence or document to cross-examine witness produced by the assessee or to produce any evidence of document or any witness in rebuttal of the additional evidence produced by the appellant. Thus, Rule 46A(3) contemplates not only production of evidence but also examination of witness before the first appellate authority as additional evidence. Now, in this case, the assessee has been contending that he had already filed a confirmatory letter from Smt. Girija Devi. The Assessing Officer denies this fact and says that it was never filed. One of the documents filed before the CIT(Appeals) was the confirmatory letter from Smt. Girija Devi. It is not mentioned by the learned Accountant Member that the documents produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to receive additional evidence in the appeal before them are just like the powers of a Civil Court under Order 41 Rule 27. If the Tribunal comes across a crucial document like bank account to prove all the three ingredients essential to establish the truth of the cash credit, in my opinion, it will not be in the interests of justice to deny admission of such crucial evidence into the records by simply stating that it was not produced before the Assessing Officer but it was produced at a later stage. The bank account cannot be manufactured or concocted to suit the convenience of any party. An extract of the books of account maintained by the bank is very much relevant under the Bankers Books Evidence Act. I, therefore, hold that the ld. Accountant Member is not justified in rejecting the additional evidence or in concurring with the purported decision of the CIT (Appeals) in rejecting the additional evidence produced before him. Smt. Girija Devi was stated to be the wife of Shri Dwarika Prasad himself and she is also stated to be an assessee in Ward No. 1, Gaya. It is stated now before me that Smt. Girija Devi was having S.B. A/c. No. 2675 in Bank of India, Gaya. From that accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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