TMI Blog1996 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessee ? 2. Whether, on the facts and circumstances of the case, the Tribunal was justified in law in upholding that the cash credit of Rs. 82,000 appearing in the name of the three cash creditors in the books of account of the assessee were correctly treated as the assessee's income from undisclosed sources by the Revenue within the meaning of section 68 of the Income-tax Act, 1961 ? " We may state the following facts : The assessee, a firm registered under the Indian Partnership Act, carried on the business of contract work. The questions relate to the assessment year 1981-82. An amount of Rs. 1,70,000 had been shown as cash credit received from seven creditors, namely, Bhagchand Jain, Surajmal Royal, Tarachand Sharma, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, without meeting the persons who are at the helm of affairs, met the accountant of the said firm. The accountant informed the Income-tax Inspector that there were no such persons. The Inspector of Income-tax, however, did not consider it necessary to make any further enquiry and take the statement of the owners of the said firm. On the basis of the information received by the Inspector of Income-tax from the accountant of the firm of R. D. Sharma and Co. that the addressees were fictitious persons, the Assessing Officer added the said amounts in the hands of the assessee as income from other sources. This was challenged by the assessee before the Commissioner of Income-tax (Appeals). As the fact of the information given by the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances and findings of fact given by both the authorities below in their respective orders. In such a situation, the order of the Commissioner of Income-tax (Appeals) cannot be maintained. Accordingly, we support the conclusion arrived at by the Income-tax Officer that the assessee has failed to discharge the burden in view of the circumstances of the finding of facts in the respective orders. In such a situation, the appeal cannot be sustained. " Situated thus, the assessee requested the Tribunal to refer the questions to this court under section 256(1) which however was refused and the assessee, therefore, filed the aforesaid Civil Rule No. 7(m)/92 and this court directed the Tribunal to refer the said questions. Hence, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee must know the present address that (sic) these are the persons genuine in giving the loan, Mr. Joshi also submits that at the time when they received the loan they knew the persons and definitely the assessee must have received all the information about the persons granting loan. Mr. Joshi further submits that section 68 empowers the Assessing Officer when he is not satisfied the cash creditors in terms of coming to a conclusion (sic). On the rival contentions of learned counsel, it is to be seen whether the Tribunal's order is just and proper. Section 68 of the Act empowers the Assessing Officer to make enquiry specifically satisfied regarding the cash credit. If he is satisfied that these entries are not genuine he has eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not proper on the part of the enquiry made with the accountant. Besides, at what time enquiry was made is not available. The assessee had specifically stated that the said Matadeen Saraf received the money from R. D. Sharma and Co. If this is true by stretch of imagination that these persons were fictitious, it is an admitted fact that those three creditors were assessees. Mr. Joshi submits that the assessee having a small income, and returns have been filed by those three persons. If the amount was shown to be received as loan by the assessee that ought not to have been in the return. There is nothing on record to show that the Assessing Officer made any attempt in this regard to verify the same. The Tribunal observed thus : " The In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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