TMI Blog1983 (8) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial year which for the year under appeal ended on 31st March, 1978.The assessee filed the return of income declaring total income of Rs. 1,79,780.This was subsequently revised to Rs. 1,88,785. One Sujan Singh s/o Umrao Singh aged about 24 years was, during the accounting period relevant to the assessment year under appeal, serving with the assessee as cashier-cum-head booking clerk at Suraj Theatre, Sirsa. It was during the course of his duties that he collected the sale proceeds of this theatre till the last show and handed over the same next day to the cashier of the assessee firm at its headquarters. At the material time, one Pawan Kumar was the cashier of the assessee. 3. On 16th Jan., 1978, the President of India promulgated High denomination Bank Notes (Demonetisation) Ordinance, 1978. This Ordinance became an Act known as High Denomination Bank Notes (Demonetisation)Act, 1978 and received the assent of the President of India on 30th March, 1978. The Ordinance which was broad-cast on All India Radio at about 8.30 on 16th Jan., 1978 provided that no person shall after 16th Jan., 1978, transfer to the possession of another person or receive into his possession from another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take Rs. 100 and Rs. 10 notes from me and in exchange they give me Rs. 1000 notes". However, the ITO did not believe the version of the assessee that high denominational value notes encashed by tendering the same in the prescribed form in accordance with the ordinance issued by the Government came from this source. For the reasons that he recorded in his order, he rejected the explanation and held that his was income of the assessee from other source, and included in the total income for tax purposes. While rejecting the explanation of the assessee, the ITO, however, accepted that there were proper entries in the cash book of the assessee with regard to these notes on the dates which have been mentioned by Sujan Singh in his affidavit. He, however held that the cash balance as on 17th Jan., 1978 was Rs. 8,464, and, therefore, nine notes of denominational value of Rs. 1,000, each could not be in possession of the assessee for tendering them as shown by it. The assessee felt aggrieved and the assessment which was finalised by the ITO on 22nd Jan., 1980 was challenged in appeal before the CIT (A). 6. The CIT (A)heard the parties. He examined Shri Sujan Singh on oath on 21st Jan., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endering the notes for encashment was the partner whereas the notes had in fact been received by the cashier from cashier-cum-head booking clerk Sujan singh of Suraj Theatre. Therefore, nothing turns on this contradiction. 8. The ld. counsel for the assessee emphasised that it is for the Revenue now to prove that what the books of account indicated. What the affidavit of Sujan Singh showed and what he had clarified in his statement before the CIT(A) is not true. For his there is no evidence except suspicion. Relying on the judgement of the Supreme Court in the case of Mehta Partkih an Co. vs. CIT (1956) 30 ITR 181 (SC) the ld. counsel for the assessee submitted that as cash book of the appellant was accepted and the entries therein were not challenged, and neither further accounts nor vouchers were called for and the cashier at the headquarters of the assessee firm was not examined it was not open to the Revenue to challenge the correctness of the cash entries or the statement made in the affidavit by Sujan Singh. He pointed to the Supreme Court Judgement in the case of Lal Chand Bhagat Ambica Ram v. CIT (1959) 37 ITR 288 (SC) where even interpolations in the books of accounts w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t handing over the money to the other hand not tendering it in the term which has been used in the Ordinance. There was no transaction as such with any one else and the assessee could not have a transaction with itself. Therefore, the sale proceeds on 16th Jan., 1978 have to be taken into consideration in considering the cash availability with the assessee by clubbing the opening cash balance as on 16th Jan., 1978 at the head quarters and adding to that the cash tendered by Sujan Singh on 17th Jan., 1978 representing cash collections at Suraj Theatre on 16th Jan., 1978 till the last show. When viewed in this manner we find that the assessee had sufficient cash balance to account for nine high denomination notes of Rs. 1,000 each. 11. Much has been made the contradictions in the affidavit and the statement of Sujan Singh with the declaration filed by the assessee on 19th Jan., 1978. Here again there may be an area of suspicion and doubt in what is stated in column 16 by the partner who filed the form of declaration and what is stated in the affidavit and the statement of Sujan Singh. It is very strange that this statement of Sujan Singh and affidavit were not examined along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17th Jan., 1978 representing the sale proceeds of the tickets on 16th Jan., 1978 is in the normal course and reasonably acceptable. We therefore do not find anything which could give rise even to suspicion. However even if a suspicion could arise it cannot take the place of evidence and what is required to controvert the claim of the assessee is evidence as stated by the Supreme Court in the case of Sreelekha Banerjee and Ors. vs. CIT(1963) 49 ITR 112 (SC). Though this case is against the assessee but the observations of the "Court and the ratio decided of his judgement is clearly in favour of the assessee and requires the Revenue to produce in rebuttal evidence if the evidence produced by the assessee is to rejected and addition is to be made by rejection thereof. This however has not been done. 13. We also find that the books of account of the assessee have not been doubted at all. The ITO has in fact given a certification to the assessee that he entries regarding high denomination notes of Rs. 9,000 have been made in the case book in the ordinary course. If that be so in the light of the judgement of the Supreme Court in the case of Lal chand Bhagat Ambika Ram v. CIT (195 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
