TMI Blog2005 (11) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee in the relevant year? 2. Whether the mere omission on the part of the assessee to include the sum of Rs. 50,000 withdrawn from the bank in his cash book can lead to the inference, in law, that the amount represented his income? 3. Whether the mere finding that the cash book was unreliable can justify in law the addition of the two sums as income without any independent evidence?" The applicant-assessee is a firm in the name and style of M/s. Farkamal, Indore. The matter relates to the assessment year 1983-84, relevant to the previous year from January 1, 1982, to December 31, 1982. The Assessing Officer made an addition of Rs. 50,000 on account of the five creditors appearing in the books of the assessee on January 7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as on January 7, 1982, it tried to make a wrong entry of receipt of Rs. 50,000, on December 27, 1982, it tried to show a wrong entry of receipt in the first instance, thereafter tried to correct the entries and on the third occasion, on December 28, 1982, a wrong entry of debit was made to explain the same entry of Rs. 50,000. The assessee filed various applications under section 254(2) of the Income-tax Act before the Tribunal for rectification of mistake. The assessee also moved reference applications which were rejected. Thereafter, the application was moved under section 256(2) of the Income-tax Act before this court and after the same having been rejected, the assessee approached the hon'ble Supreme Court and on the basis of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer clearly opined, inter alia, as under: "(v) The surrendered amount of Rs. 50,000 on account of entry made in the name of M/s. Daruwala Brothers, covers the bogus credits of Rs. 45,000 and interest of Rs. 4,500, shown to have been paid to them because such entries were made in the book in order to explain the credit in the name of Shri Daruwala." The Tribunal, however, restored addition in respect of the account of Daruwala to the extent of Rs. 49,500 in addition to Rs. 50,000 surrendered by the assessee. Both learned counsel have placed reliance on the observations of the Tribunal contained in para 14 of its order, which reads as under: "14. After careful perusal of the relevant pages of the cash book, the ledger, balance-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not make the changes in the corresponding entries in the ledger. Had it been done, the relevant balances appearing in the ledger would not correlate with the balances appearing in the balance-sheet and profit and loss account. Therefore, we are of the considered opinion that the assessee has manipulated the cash book to overcome the discrepancies noticed by the Assessing Officer. In these circumstances, we have to pierce the veil to find out the actual state of affairs. To ascertain the truth, we have to reverse the entries manipulated by the assessee. In that eventuality we have to reduce the cash withdrawal from the bank from Rs. 1,02,253.13 ps to Rs. 52,253.13 ps and a cheque amount from Rs. 67,000 to Rs. 17,000 appearing at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tune of Rs. 49,500 under section 68 of the Act. We, therefore, restrict the addition to that amount. Accordingly, we set aside the order of the Commissioner of Income-tax (Appeals) and confirm the additions." From the observation of the Tribunal, it is manifest that insofar as the withdrawal of the amount of Rs. 67,000 is concerned, it is not the case that such an amount had not been withdrawn by the assessee. The Tribunal has recorded its agreement after referring to the transaction that this amount was unexplained investment or difference in the balance-sheet. In either of the above eventualities we are unable to subscribe to the view of the Tribunal that the amount was unexplained investment or difference in the balance-sheet. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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