TMI Blog1998 (2) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... trai?" The assessee is an individual. This reference pertains to the assessment of her income under the Income-tax Act, 1961, ("the Act"), for the assessment year 1971-72, the relevant previous year being previous year ended on October 30, 1970. In the course of proceedings for assessment for the above assessment year, the Income-tax Officer noticed that the assessee had taken two loans, one of Rs. 1,00,000 from one K. Commercial Company and the other of Rs. 40,000 from Shri Champaklal Dalpatrai. He called upon the assessee to produce confirmation letters in respect thereof from the concerned creditors. The assessee did not produce the same. Thereupon, the Income-tax Officer, of his own accord, tried to make necessary enquiries. In the case of K. Commercial Company, he failed to do so because the summons issued by him could not be served as the said company was not found to be in existence. In respect of the loan from Champaklal Dalpatrai, he found that the assessee had failed to identify the creditors. The Income-tax Officer, therefore, concluded that the two amounts alleged to have been borrowed by the assessee from the above creditors were bogus. Hence, he added the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Commissioner, in our view, was justified in not taking on record the said evidence sought to be produced before him." In view of its above findings, the Tribunal held that on the facts and circumstances of the case, and the material on record, there was no evidence on record to prove the genuineness of the loan transactions. Being aggrieved by the above order of the Tribunal, the assessee applied for reference of the questions of law arising out of the order of the Tribunal to this court for opinion under section 256(1) of the Act. The Tribunal rejected the same. The assessee thereupon applied to this court under section 256(2) for a direction to the Tribunal to state the case and refer the questions sought to be referred by the assessee to this court for opinion. The High Court directed the Tribunal under section 256(2) of the Act to state the case and to refer the questions. Hence, this reference. We have heard Mr. A. Jasani, learned counsel for the assessee. The main controversy in this case is about the scope and ambit of rule 46A of the Rules. Rule 46A reads as follows : "46A. Production of additional evidence before the Appellate Assistant Commissioner.---(1) The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect the Income-tax officer to make further enquiry and to report the result of the same to him. This position has been made clear by sub-rule (4) which specifically provides that the restrictions placed on the production of additional evidence by the appellant would not affect the powers of the Appellate Assistant Commissioner to call for the production of any document or the examination of any witness to enable him to dispose of the appeal. Under sub-section (4) of section 250 of the Act, the Appellate Assistant Commissioner is empowered to make such further inquiry as he thinks fit or to direct the Income-tax Officer to make further inquiry and to report the result of the same to him. Sub-section (5) of section 250 of the Act empowers the Appellate Assistant Commissioner to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in the grounds of appeal, on his being satisfied that the omission of the ground from the form of appeal was not wilful. It is clear from the above provisions that the powers of the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The scope of his powers is coterminou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the borrowers, viz., Champaklal Dalpatrai by relying upon the fact that the amount had been received by the assessee by cheque and repaid by cheque. In support of this contention, the assessee wanted to produce photostat copies of the cheques, a certificate from the bank to show that a sum of Rs. 40,000 was received by the assessee from Champaklal Dalpatrai by cheque and a copy of the account of the assessee with the said bank. Prima facie, this information was necessary to decide the controversy in regard to the genuineness of the loan of Rs. 40,000 taken by the assessee from Champaklal Dalpatrai. The Appellate Assistant Commissioner should have considered this evidence in exercise of his powers under sub-sections (4) and (5) of section 250 of the Act which he failed to do. In our opinion, it is a fit case where the Appellate Assistant Commissioner should have exercised the powers conferred upon him under sub-section (4) of section 250 of the Act and taken on record the xerox copies of the cheque, the certificate from the bank and the copy of the account of the assessee with the said bank and considered the same for deciding the genuineness of the loan of Rs. 40,000. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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