TMI Blog1984 (2) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee which may be briefly adverted to here. A sum of ₹ 93,017 was claimed by the assessee as bad debts. This item comprised a number of claims of varying amounts against several parties. The ITO was of the opinion that these bad debts could not be allowed. In respect of some of the items, he thought, the disallowance was necessary because the debt did not represent a business loan. In respect of some items, however, he found that the loan had been advanced by a concern known as Delhi Iron Syndicate and that the loan did not pertain to the assessee-company's business. The second item considered by the ITO was a loss of ₹ 51,632 claimed by the assessee on account of revaluation of certain shares held by it as stock-in-trade. The ITO came to the conclusion that the shares did not represent its stock-in-trade and that aforesaid entries had been made merely to transfer to the assessee certain losing investments of one of the partners of the assessee-firm. Thirdly, the ITO came across deposits aggregating to ₹ 12,01,123 in the balance sheet of the assessee. He was of the opinion that in respect of a number of these depositors, whose credits came to ₹ 63, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply in respect of these deposits nor could they apply in respect of interest disallowances, which was consequential to the deposits. With regard to loss of shares, the AAC was convinced after having carefully considered the matter that the transaction was not collusive and that the provisions of section 28(1)(c) could not be applied in respect of this claim by the assessee, even if the ITO did not accept the contention of the assessee that it was a dealer in shares. Coming to the bad debts, the AAC found that the assessee was carrying on the financing business and, therefore, there was no question of saying that the claim of bad debt was bogus. He observed that if some of the items could not be allowed for various reasons, it did not mean that claim made by the appellant was false. He, therefore, found that on the whole, the provisions of section 28(1)(c) did not apply to the facts of the case and as such the assessment was barred by time. Consequently, he annulled the assessment. 5. Dissatisfied with the aforesaid order of the AAC, the department went up in appeal before the Tribunal. The Tribunal considered the provisions of section 34(3) and section 28(1)(c) of the Act. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding that the assessment ought not to have been annulled by the AAC as barred by limitation. 6. The Tribunal also expressed a prima facie view that at least some of the cash credits had not been satisfactorily proved and that in respect of some of them, at least there was no evidence tendered by the assessee in support of the statement that they were borrowed from the parties mentioned. Similar prima facie view was also expressed in respect of the loans of shares as also in respect of the bad debts, but after expressing the prima facie view, the Tribunal observed : We are now concerned, as we have explained, with the limited question, whether on the date of assessment and in view of the material that was before him, the Income-tax Officer could show that this was a case to which the provisions of section 28(1)(c) apply, i.e., whether there is a case in which the Income-tax Officer was satisfied in the proceedings before that there was concealment, etc. We are of the opinion that the answer to this can only be in the affirmative. 7. The assessee, being dissatisfied with the order of the Tribunal, filed an application for referring the question of law to this Court and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-firm also disclosed that the shares were purchased as investments and not as stock-in-trade. In view of these findings, the Tribunal has come to the conclusion that the assessee has deliberately furnished false and inaccurate particulars in respect of these shares. The loss was not incurred due to sale of shares but on the ground that the shares had no value or little value on 31-3-1953. Therefore, the Tribunal is right in coming to the conclusion that such a loss could not be claimed when the shares were purchased, as investments and not as stock-in-trade. As regards the deposits, the Tribunal has, after considering the reasons, recorded by the ITO, come to a conclusion that the ITO had rightly held the income of ₹ 63,700 to be from the undisclosed sources. The Tribunal has further come to the conclusion that the claim of interest was certainly not incidental to the deposits which had not been proved to be genuine and, thus, the provisions of section 28(1)(c) were attracted to the extent of ₹ 1,958, which was claimed as interest on non-genuine loans, which have been treated as the assessee's income from the undisclosed sources. The findings of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
