GIAN CHAND JAIN PROP.M/S.JIAN ELETRIC. vs. INCOME TAX OFFICER CHD.

order of the Income tax Appellate Tribunal

, (

“

) Chandigarh Bench Chandigarh for short the Tribunal”

-

. passed on in Income tax Appeal No 1096/ /1994

1992-93: CHD for the assessment year 1-

Whether under the facts and circumstances of the

case ITAT was justified in law by upholding the

squared up accounts of Deepak Chadha for a loan

. 9,500/-,

. 9,000/-, of Rs Pardeep Kumar Rs

. 9,000/-

. Som Nath Rs and Darshan Singh Rs 6,000/-

as income from undisclosed sources of

the appellant only on the basis that the appellant

. has not produced them before the ld Assessing . Authority

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, That on the facts and circumstances of the case

whether ITAT was justified in law by interpreting

68

- the provisions of Section of the Income Tax , 1961

. Act in maintaining the addition of Rs 1,08,500/-

on account of various unsecured loan

as mentioned in the order against each person as

. assessee’s income from undisclosed sources ”

The assessee filed return for the assessment 1992-93

. 18,850/-. year declaring an income of Rs The ,

,

143(3)

, assessment after scrutiny under Section of the Act

. 2,56,010/-, was finally concluded at an income of Rs vide

, order dated The assessing officer amongst others

made addition in declared income on account of squared up

,

,

account of Deepak Chadha Pardeep Kumar Som Nath and .

,

Darshan Singh Besides this an addition on account of

unexplained cash credit on account of unsecured loans

. 1,08,500/-

amounting to Rs was also made under Section 68

.

of the Act The assessee carried appeal before the

- ( ) [(

“ ( )] . Commissioner of Income tax Appeals for short CIT A ”

.

The appeal was partly allowed The assessee still took up

4 -

. 52 2002 of

.

, matter before the Tribunal The Tribunal as well concurred

with the findings of the authorities below and consequently

, - -

dismissed the assessee’s appeal in so far as the challenge

,

.1 Regarding Question No .

The issue that arises for consideration in this Court ,

-

is whether the squared up cash credits in the names of four , ,

,

,

persons namely Deepak Chadha Pardeep Kumar Som Nath

,

. 9,500/-, 9,000/-, and Darshan Singh amounting to Rs 9,000/- 6,000/-

and respectively were to be treated as

genuine and could not form part of the assessee’s income

.

, from undisclosed sources The assessing officer while

, considering the genuineness of the above amounts observed

that the assessee had not produced the said persons to

prove the genuineness of the unsecured loans and

, . . consequently added the aforesaid four amounts i e total

. 33,500/-

. amount of Rs to the income of the assessee

-

( )

The appellant assessee contended before the CIT A that no

sufficient opportunity was provided to it to produce aforesaid

, ,

four persons for verification and thus the addition of 5 -

. 52 2002 of -

squared up accounts and unsecured loans treated as

.

( ), unexplained cash credits was not justified The CIT A while

,

upholding the finding of the assessing officer recorded as : under “2. 4. I have carefully examined the rival .

submissions After examination of the assessment

,

records maintained by the AO I find that the facts

.

stated by the appellant are not correct In fact the

-2

facts stated by the AO in para of his

. 23.12.1993, assessment order are correct On the

appellant had categorically stated before the AO as : under “

Shri Deepak Chadha and Shri Pardeep

, ,

Kumar are not traceable and therefore cannot be .

,

produced As regards Shri Jarnail Singh and

. Suman Jain seek time to produce ”

. . ,

Again on Shri G C Jain himself along

: with his counsel stated before the AO as under “

, that following persons are not traceable and ,

:

therefore cannot be produced

6 -

. 52 2002 of - i .

Sh Som Nath - ii .

Sh Darshan Singh” 2.5 ,

4

Therefore all the above said creditors

were never produced by the appellant and in fact

he had categorically stated that they were .

untraceable When as per assessee’s own

, admission these creditors were untraceable it was

not just possible to give their latest addresses and

no such addresses were ever given by the

. ,

appellant to the AO

Therefore I have no

hesitation in holding that the appellant had neither

proved the identity nor the capacity of these

creditors nor the factum of actual passing of cash

.

was proved The AO had correctly involved the

68

provisions of section and added this amount of . 33,500/-

. Rs to the income of the appellant This , , . addition is therefore upheld ”

The above finding was affirmed by the

. Tribunal in the appeal preferred by the assessee Learned

counsel for the assessee has now sought to challenge the 7 -

. 52 2002 of

-

said finding on the ground that the non production of the

above four persons could not be a ground for treating the

. income to be from undisclosed sources of the assessee In ,

.

our view the contention does not carry any weight This is

a finding of fact recorded by the authorities below that the

cash credits were not genuine and it was to be treated as

.

income of the assessee from undisclosed sources Once the

assessee was unable to produce those persons from whom

, he had shown the above squared up cash credits the

inference drawn by the authorities below cannot be said to be . perverse

.

,

Now adverting to the second question whether the

assessing officer was right in treating the unsecured loan to

68 various persons as unexplained cash credits under Section

?

,

of the Act The Tribunal while upholding the finding of the ( )

,

:- CIT A in this regard recorded as under “

I have gone through the submissions advanced on

.

behalf of the assessee It is strange that most of

. 19,000/- the creditors have given loans of Rs to 8 -

. 52 2002 of .

the assessee This obviously has been done to

269

hoodwink the provisions of section SS of -

Income tax Act which prohibits receipt of cash

. 20,000/-

. . . deposit of Rs or more The A O and ,

( )

on appeal the CIT A have held that these

creditors had no capacity to advance loans to the .

assessee This conclusion has been reached after

examining source of income of the creditors and

.

their family status In reaching the above conclusion

all relevant and material facts have been taken into .

account I have nothing before me to take a view

. contrary to the one taken by the lower authorities ,

Therefore these cash credits cannot be treated as

.

provided in accordance with law The Revenue

authorities were justified in treating cash credits as

. assessee’s income from undisclosed sources In

,

the same way they were fully justified in not

. 14,000/-

accepting addition of Rs to the capital

.

account of the assessee as genuine The amount

was introduced from an undisclosed source and 9 -

. 52 2002 of

. was rightly added to the income of the assessee ,

,

Thus additions referred to above were rightly

. .

( ). made by the A O and confirmed by the CIT A I

agree with them and uphold their orders on these . credits ”

The above again being a finding of fact

,

against which no misreading could be shown no interference

.

is called for by this Court Learned counsel for the appellant

- made an unsuccessful attempt to persuade this Court to re

appreciate the evidence and record a finding in favour of the .

assessee We are not inclined to accede to the submission

. -

, made by the counsel Re appraisal of evidence without

,

reference to any material which had been misread does not

260-

. fall within the domain of Section A of the Act

No substantial question of law arises in this appeal

, , for consideration of this Court and the appeal is therefore . dismissed (

) AJAY KUMAR MITTAL JUDGE

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