TMI Blog1993 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... years 1978-79/1979-80, respectively ? " Shortly stated the facts leading to this reference are that the assessee is Messrs. Precision Finance Pvt. Ltd. and the assessment years involved are 1978-79 and 1979-80 for which the accounting periods ended on June 30, 1977, and June 30, 1978, respectively. The business of the assessee-company is loan financing. In the assessment for the assessment year 1978-79, there were two assessments under section 144 due to non-compliance by the assessee but both the ex parte assessments were reopened under section 146 of the Income-tax Act, 1961. The present assessment was a third assessment made under section 143(3)/146 on March 11, 1986. In the course of assessment proceedings for the year 1978-79, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation about the above loan creditors. On enquiry, it was found that the income-tax file numbers given in respect of Mohanlal Golcha (Sl. No. 1) was not available and the said party was not also available at the given address at 161/1, M. G. Road, Calcutta. In respect of Assam Jute Supply Company (Sl. No. 2), the assessee neither filed the confirmatory letter nor the address was fully given which could be verified by the inspector. In respect of Associated Syndicate Co. (SI. No. 3), the inspector could not find the file in District (1), C-Ward, Calcutta. Moreover, the creditor, Messrs. Associated Syndicate Company, was not traceable at the given address at 2, Nawab Badruddin Street, Calcutta. In respect of Sun Enterprises (Sl. No. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 19,631 for the assessment year 1978-79. Similarly, for the assessment year 1979-80, the Assessing Officer made an addition of Rs. 4,50,000 as income from other sources as he found similar defects in respect of cash credits from the following parties: 1. Mohanlal Chola. 2. Rajasthan Jute Supply Company. 3. Assam Jute Supply Company. 4. Rajendra Kumar Gupta. 5. Hemraj Sagarmal. 6. Lakshmi Narayan Botanlal. 7. Sitaram Khaitan. 8. Kedarnath Ramratan. The Assessing Officer also added interest relatable to the fictitious loans amounting to Rs. 37,512 for the assessment year 1979-80. Aggrieved by the orders of the Assessing Officer, the assessee filed appeals before the Commissioner of Income-tax (Appeals). The Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax (Appeals). We have taken into consideration the arguments advanced by learned counsel for the assessee and the learned departmental representative, Sri K. L. Bhowmick. We do find substance in the assessee-company's appeals to allow relief. The assessee-company has proved the identity of the creditors and their creditworthiness and the genuineness of the transactions should have been found out by the Income-tax Officer by making investigation from their bank accounts because of the account payee cheques being issued and other related evidence. The additions on account of these credits cannot stand. Therefore, we are unable to confirm the order of the Commissioner of Income-tax (Appeals)." The following facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile in District V(I)/G- 25,000 V(I)/734/8/G Ward, and moreover the assessee is not ----------------- available at 203/1, M. G. Road, Calcutta (i) Moolchand Chabra He has shown commission on interest 25,000 11-011-PX-9410 for bogus name-lending business. His ------------------------- balance-sheet for the relevant year does Cal/IV(2)/M not reflect the loans given to the assessee (j) Somani Supply Syndicate The loans advanced to the assessee to 1,00,000 Co. the tune of Rs. 50,000 were not reflected 11-054-FQ-0953 in the balance-sheet of the firm as on -----------------------March 31, 1977. But the party filed Cal/C/VI(C) photostat copy of the balance-sheet where loans were reflected. The loans were not reflected in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e genuineness of the transactions. In our view, on the facts of this case, the Tribunal did not take into account all these ingredients which have to be satisfied by the assessee. Mere furnishing of the particulars is not enough. The enquiry of the Income-tax Officer revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. The Tribunal did not apply its mind to the facts of this particular case and proceeded on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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