TMI Blog2006 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ,55,000 as the income of the assessee. - - - - - Dated:- 4-8-2006 - Judge(s) : MADAN B. LOKUR, VIPIN SANGH. JUDGMENT The judgment of the court was delivered by Vipin Sanghi J.- This is an assessee's appeal under section 260A of the Income-tax Act (for short "the Act") against the order dated September 16, 2005 passed by the Income-tax Appellate Tribunal (for short "the Tribunal") in I.T.A. No. 901/Del/2003 pertaining to the assessment year 1992-1993. The relevant facts in brief are that the Assessing Officer upon scrutiny of the documents filed by the assessee along with his return found that there was a credit entry of Rs. 2,55,000 made on February 1, 1992, in the savings bank account of the assessee. The assessee was asked to explain the nature and the source of the receipt. In response, he filed a declaration under the Remittance in Foreign Exchange (Immunities) Scheme, 1991 to claim that this amount was received by debit to an NRE account. It was not clear from the certificate issued by the bank as to whom the account belonged. To verify the genuineness of the declaration, a reference was made to the State Bank of India, Race Course Road, Bangalore, (for short "the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind the explanations furnished by the assessee to be satisfactory, he added the amount of Rs. 2,55,000 as income from undisclosed sources. In appeal before the Commissioner of Income-tax (Appeals) preferred by the assessee, the order of the Assessing Officer was maintained. Against the order of the Commissioner of Income-tax (Appeals) the assessee again preferred an appeal before the Tribunal which has been dismissed by the impugned order. The Tribunal considered the matter and noticed that till date the assessee had not been able to establish the identity of Arun L from whom the amount was found to have been received by the assessee. It was also noticed that the assessee had failed to avail of the opportunity which had been granted by the Tribunal on an earlier occasion. It was also noticed that when the assessee was confronted with the fact that the amount did not come from any NRE account, but that it came from a resident depositor's account, the assessee demanded evidence for the same. Accordingly he was given a copy of the letter issued by the Chief Manager, State Bank of India. The Tribunal also noticed that the Assessing Officer had found that the said account was opened o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered and interpreted on various occasions by this court. In CIT v. Sophia Finance Ltd. [1994] 205 ITR 98 (Delhi) the Full Bench observed as follows: "As we read section 68 it appears that whenever a sum is found credited in the books of account of the assessee then, irrespective of the colour or the nature of the sum received which is sought to be given by the assessee, the Income-tax Officer has the jurisdiction to enquire from the assessee the nature and source of the said amount. When an explanation in regard thereto is given by the assessee then, it is for the Income-tax Officer to be satisfied whether the said explanation is correct or not. It is in this regard that enquiries are usually made in order to find out as to whether, firstly the persons from whom money is alleged to have been received actually existed or not. Secondly depending upon the facts of each case, the Income-tax Officer may even be justified in trying to ascertain the source of the depositor, assuming he is identified, in order to determine whether that depositor is a mere name lender or not. Be that as it may, it is clear that the Income-tax Officer has jurisdiction to make enquiries with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced a credit of Rs. 1 lakh each to the assessee. However, the said explanation was not considered to be satisfactory by the Tribunal since these creditors were persons of small means and there was no evidence of the availability of the amount advanced by them to the assessee on the dates on which they were ostensibly advanced to the assessee. In the present case it is clear that the initial explanation offered by the assessee was found to be patently wrong, inasmuch as, the Chief Manager of the State Bank of India clarified that the amount credited to the account of the assessee came from a savings bank account of one Arun L and not from any NRE account. This assertion was admittedly false, inasmuch as the funds did not come from any NRE account. Further investigation showed that the said Arun L was not traceable, his address was found to be incorrect and that the account had been opened, operated and closed within a span of about 20 days. It was also found that cash had been deposited in the said account to the tune of Rs. 25 lakhs and withdrawn by way of demand drafts including the one in the name of the assessee on the day of closure of account. It is clear from the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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