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TMI Blog2005 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... 36,921 + Rs. 5,42,512) the Tribunal was legally correct in holding that the provisions of section 69 were applicable and in further taking a view that the source of investment in such demand drafts remained unexplained, so as to attract additions for the same in its hands?" The brief facts of the case are as follows: The dealer/assessee (hereinafter referred to as the "assessee"), was carrying on the business of manufacture and sale of glassware. For the manufacturing of glassware, the assessee required coal as a fuel for the operation of its furnaces. Two searches under section 132(1) were conducted at the office premises of the Chief General Manager, Central Coal Field Ltd., Ranchi (hereinafter referred to as "CCL"). The first search was conducted on July 30,1990, and as per panchnama of that date, seizure of cash of Rs. 5,42,512 was made and it was found that the assessee had submitted a coal application dated May 31, 1990, in the office of the Chief General Manager, CCL, Ranchi, vide its letter dated May 31, 1990, under the signature of a partner, Sri Laxmi Kant Bansal. With this letter, a recommendation of Eastern Coal Field Limited, Calcutta, vide their letter dated Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given address". Therefore, the direct enquiry was also sent to the Income-tax Officer, Calcutta, in the case of M/s. Arkay Glass Works, the sister concern of the assessee. The Income-tax Officer, Calcutta, reported that M/s. Sweta Coal Sales Corporation to whom summons were issued, did not produce the books of account. The facts of Shri Krishan Kumar Thakkar being unknown at the given address and failing to attend before the Assessing Officer were made known to the assessee. The Assessing Officer mentioned, the assessee, however, still failed to produce him. Despite further opportunity, he was not produced. Thus, he observed that it would be clear that there was no such person as M/s. Sweta Coal Sales Corporation or as Shri Thakkar. If the investment was really made by that party, there was absolutely no reason why they failed to produce books of account before him or before the Assessing Officer to prove the source. Therefore, the Assessing Officer held that the agreement of the assessee with M/s. Sweta Coal Sales Corporation was bogus. He further mentioned that M/s. Sweta Coal Sales Corporation did not figure anywhere in the records of CCL, Ranchi, as agent of the assessee. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Sweta Coal Sales Corporation. It was also submitted that the coal lifted by him in June, 1990, was not immediately sent to use due to panic amongst the agents due to income-tax raids but was actually sent in January and February 1992, when it was recorded in the books. It was stated that during the intervening period the coal remained with the agent in his godown. It was further stated that blank letter papers with signatures were supplied to M/s. Sweta Coal Sales Corporation who authorised Shri Arjun Thakar and others to deal with the lifting of coal. Regarding drafts of Rs. 5,42,512, the assessee reiterated the same contentions as were raised before the Assessing Officer. He stressed that he did not apply for any road permit to the Director of Industries, Kanpur. He submitted that the affidavit and other papers filed before CCL were forged inasmuch as the affidavit was sworn at Ranchi but the partner, Shri L.K. Bansal, never went to Ranchi. The firm did not know anything about Shri Anil Kumar Thakkar, Shri Arjun Thakur, Shri D.K. Murti who were allegedly authorised to lift the coal. The firm did not know anything about Shri Surendra Bahadur Singh or Shri Girish Narain Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer to obtain expert opinion. The affidavit is sworn before the notary and the identity of the persons swearing the affidavit id certified by some responsible person. The story of forged signatures does not carry any conviction with me. On the facts as contained in the assessment order, the Assessing Officer was justified in reaching the conclusion that the investment of Rs. 5,42,512 had been made out of unexplained funds. The addition is confirmed." Against the order of the Commissioner of Income-tax (Appeals), the appellant filed an appeal before the Tribunal. The Tribunal confirmed the aforesaid two additions. The Tribunal held as follows: "We have heard the parties and perused the records of the case. The claim of the assessee is that the investment of Rs. 7,36,921 has been made by M/s. Sweta Coal Sales Corporation on behalf of the assessee and the assessee has not made any investment in the purchase of the said draft. It is seen that the Assessing Officer has made enquiries to find out the correct factual position with regard to the investment in the purchase of the said draft. The Assessing Officer issued summons to M/s. Sweta Coal Sales Corporation, however, M/s. Sweta Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions." We have heard Sri S.K. Garg, learned counsel for the appellant, and Sri Shambhu Chopra, learned standing counsel appearing on behalf of the Revenue. Learned counsel for the appellant submitted that the Tribunal has erred in confirming the addition of Rs. 12,79,433 under section 69A of the Act. He submitted that the draft of Rs. 5,42,512 was not got prepared by the appellant and the entire documents relating thereto, were not submitted by the appellant and the signatures of the appellant in all the documents were forged, therefore, the draft for Rs. 5,42,512 should not be treated as relating to the appellant. With regard to the addition of Rs. 7,36,921, the submissions made before the authorities below have been reiterated and it has been submitted that merely because M/s. Sweta Coal Sales Corporation could not be produced or could not appear in pursuance of the said notice under section 131 of the Act, the amount deposited by them, could not be disbelieved in view of the affidavit filed by them, in which they have admitted to have prepared the draft for Rs. 7,36,921. Learned standing counsel submitted that the Tribunal has considered each and every aspect of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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