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TMI Blog1973 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was justified in refusing to refer a question of law arising from its order. We shall presently set out the relevant facts. Aggrieved by the decision of the Tribunal, the Commissioner of Income-tax, Andhra Pradesh, moved the Tribunal under section 256(1) of the Income-tax Act, 1961, to submit to the High Court the following question of law : " Whether, on the facts and in the circumstances of the case, and having held that the assessee was in the habit of recording cash purchases as credit purchases and the cash credits remained unexplained was the Income-tax Appellate Tribunal justified in deleting the addition of Rs. 35,996 made by the Income-tax Officer for the assessment year 1963-64 giving benefit of the intangible additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent years. The Income-tax Officer considered that it was inconceivable that those persons with very small means of income and living in far off places would sell their goods on credit to the assessee and keep quiet without making any attempt to draw the sale proceeds from the assessee. They were described by the Income-tax Officer as street hawkers. The Income-tax Officer attempted to make cross-verification of those purchases by issue of summons to the vendors. Except Apparabatla Gangiah, summons could not be served on others. Shri Gangiah testified that he had given Rs. 2,000 to the assessee and the source thereof was traced down to his savings. The evidence of this person was not believed by the Income-tax Officer on the ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion that there was no warrant to hold that the purchases were described as credit purchases with any sinister motive attached to them. With reference to the cash credits in the diverse accounts found by the Income-tax Officer, the Appellate Assistant Commissioner agreed that the genuineness of the cash credit standing in the name of Smt. Althi Seethamma amounting to Rs. 4,000 was not established. With reference to the cash credit standing in the name of Shri Chandaka Suryanarayana, he accepted the genuineness of the same. On an appreciation of the evidence regarding the cash credits, he came to the conclusion that cash credit to the extent of Rs. 6,500 remained unproved and the Income-tax Officer was unjustified in making an additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cern, while it was actually a cash purchase. On being confronted, the assessee did not feel shy of recoiling from his earlier statement and making an admission that it was only a cash purchase. The Appellate Assistant Commissioner laboured under the misconception of the principle of judging the exigency of describing cash purchase as credit purchase with reference to the availability of cash on the various dates. We would have allowed the departmental appeal, but for the assessee's counsel taking shelter under intangible additions. The intangible additions in the preceding two years amounted to more than Rs. 50,000. We can hold that the aggregate of the purchase amount as well as the cash credits yet remaining unexplained would be fully cov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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