TMI Blog1959 (8) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, would be admissible in evidence and could be acted upon in holding the sum of ₹ 85,050 kept as deposits to be the income of the assessee? 2. Whether the affidavits filed by the depositors before the learned Appellate Assistant Commissioner, admitting the said deposits to be their own moneys, could not be relied on and acted upon in law, in the absence of any rebutting evidence, without an examination of the persons filing the affidavits? 3. Whether the entries in the books of account of the assessee kept in regular course of business showing the deposits in the names of remaining depositors, whose statements were not recorded under section 37 of the Income-tax Act, but who filed affidavits admitting the amounts deposited to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... 9,000 7. Maharuddin ... 11,600 8. Suraj Mia ... 10,500 9. Mohd. Talim ... 3,950 85,050 The assessee explained that he had taken temporary loans from the above-named persons with a view to meet his liabilities to certain Calcutta parties. The alleged depositors were found to be all cultivators by profession, and the Income-tax Officer issued summonses under section 37 of the Indian Income-tax Act to the first eight persons for examination, but only one of them, namely, Suraj Mia, appeare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re correct. The other persons whose names appeared as depositors in the books of the assessee in regard to the other amounts, as mentioned above, also filed affidavits stating that they had deposited the amounts with the assessee as shown in their books. The learned Appellate Assistant Commissioner took into consideration these affidavits filed as well as the books of account of the assessee. In his opinion, these affidavits did not show the real state of things--the alleged depositors having had at no time any sizable amount to their credit. He finds categorically that some of the alleged depositors had financial transactions with the assessee during the accounting year concerned other than the cash deposits in question, and it is seen fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was obligatory on the Income-tax Officer to administer oath to the two persons appearing before him, namely, Suraj Mia and Mohd. Talim, when they were examined in pursuance of the provisions of section 37 of the Income-tax Act. The question is: Whether the statements of these two persons which were not recorded on oath, were admissible in evidence and could be acted upon in holding the sum of ₹ 85,050 to be the income of the assessee. On a reference to section 37 of the Act, it would appear that it gives the Income-tax Officer, Appellate Assistant Commissioner, Commissioner and Appellate Tribunal the powers as vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters, namely: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them is administered, shall invalidate any proceeding or render inadmissible any evidence whatever, in or in respect of which such omission, substitution or irregularity took place, or shall affect the obligation of a witness to state the truth. In this case, therefore, the statements of the persons were admissible, and we must accordingly answer the first point raised under reference in favour of the Department. The second point which I have already quoted raises the question as to whether the affidavits filed at the appellate stage before the Appellate Assistant Commissioner were conclusive on the point under investigation, and whether the Appellate Assistant Commissioner was obliged to act upon the same in the absence of any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any other purpose. In fact, these petty cultivators could hardly have had so much surplus money with them. On these facts and circumstances, I am of the view that the Income-tax Officer's action in treating the alleged deposits as the assessee's income from some undisclosed source is quite justified. No limit can be put to the discretion of the officer concerned as to whom or what document he will believe or what he will reject. He can take into consideration all relevant and admissible evidence rather in a wider sense than strictly legal and, therefore, there was nothing wrong in rejecting the statements contained in the affidavits of persons who did not offer themselves for interrogation before the Income-tax Officer concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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