MANAK CHAND AGGARWAL vs. CIT, KARNAL

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No. 96 of 2009 (O&M) Date of decision: 4.8.2009 Mr. Manak Chand Agarwal Prop. M/s Gupta Steel Co., Faridabad. ......Appellant Vs. CIT, Aayakar Bhawan, Faridabad, Haryana. ...Respondent CORAM:- HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT: Mr.S.K.Mukhi, Advocate, for the assessee. **** ADARSH KUMAR GOEL, J. (Oral) 1. The assessee has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 6.6.2008 passed by Income Tax Appellate Tribunal, Delhi “A” Bench in ITA No. 68/DEL/2005 for the assessment year 1991-92, proposing to raise the following substantial questions of law: A. “ That the order of ITAT for the year under appeal being inconsistent to that of the order of the ITAT for the subsequent assessment year is perverse being without any support to sustain the conflicting findings.” B “ Whether the Tribunal erred in confirming the addition of Rs.3,25,000/- on A/C of difference in

ITA No. 96 of 2009 -2- the balance of M/s Vijay Bottle Store, more so when Tribunal in A.Y.1992-93 held that the accounts of the said party were not reliable and the statement of the Proprietor of that firm was not reliable”. C.“Whether the Tribunal erred in law in not following its decision given in A.Y. 1992-93.”. D.“ Whether Tribunal has erred in sustaining the addition without finding the year of payment of the impugned amount.”. 2. The Assessing Officer received information that the assessee had made a credit entry in favour of another assessee, which was not genuine. Accordingly, addition was made to his income. The addition was upheld by the CIT(A) as well as the Tribunal. The Tribunal observed: “ Whereas the assessee shows outstanding liability of Rs.3,75,049 payable to M/s Vijay Bottle Stores, Sohna, the said supplier has shown the amount receivable only to the extent of Rs.50,049/-. M/s Vijay Bottle Stores is stated to have received a sum of Rs.3, 25,000/- during the financial year relevant to assessment year 1991-92 itself whereas the assessee is not showing the said payments. This fact was was confirmed by Shri Guru Gyan Singh in his statement dated 30th

ITA No. 96 of 2009 -3- January 2001. Though he did not have his books of accounts or did not remember the transaction but he confirmed that he was maintaining books of account at that time wherein the receipts received were accounted for. He also confirmed that he was not issuing receipts for cash received from customers. This statement was recorded in the presence of assessee. The assessee was afforded an opportunity to cross-examine Shri Guru Gyan Singh. In the cross-examination Shri Guru Gyan Singh reiterated that he did not possess the books of accounts as on the date. Hence, he was unable to say anything regarding the difference. He confirmed that books of accounts were written by part-time accountant as per his convenience. However, he confirmed that he used to keep accounts at that time in the financial year 1991-92. He confirmed that as on the date of statement there was no outstanding balance due. However, there is nothing in the statement, which gives an impression that the accounts as prepared by Shri Guru Gyan Singh and signed by him were incorrect. On the contrary he confirmed that the balance as on 1.4.1991 was as per the account statement given by the accountant and signed by

ITA No. 96 of 2009 -4- him. This statement was not proved to be incorrect in the cross-examination conducted on behalf of the assessee. Just as Shri Guru Gyan Singh could not produce his books, the assessee also did not produce his books of accounts. Shri Guru Gyan Singh is not under obligation to maintain his books of accounts beyond certain period whereas the assessee is under obligation, as his assessment was not completed. Though the assessee relies on his own books of accounts to argue that payment was made by him only in the subsequent year, however, such books of accounts were never produced for verification. This is for the reason best known to the assessee but since the books of accounts were not produced, the Assessing Officer is justified in drawing an adverse inference as, if such books of accounts were produced, the contention of the assessee might be proved to be incorrect. Therefore, the Assessing Officer was justified in drawing such adverse inference against the assessee. The assessee has not proved the source of payment stated to have been made to M/s Vijay Bottle Stores during financial year relevant to assessment4 year 1991-92. Therefore, the

ITA No. 96 of 2009 -5- Assessing Officer was justified in holding that such payment was made out of undisclosed sources and hence to be added as income under Section 69 of the Act.” 3. We have heard learned counsel for the assessee. 4. Learned counsel for the assessee submits that the view taken by the Tribunal is inconsistent with its order for assessment year 1992-93 and that addition was not called for as the account of M/s Vijay Bottle Stores in whose favour credit entry was made in the accounts book of the assessee, was not properly maintained. 5. We are of the view that the matter has been duly considered concurrently by the three authorities and the addition has been made and upheld. The findings of fact so recorded cannot be held to be perverse. There was no question of inconsistency with the finding for the year 1992-93 as it has been held that the amount related to assessment year in question. 6. No substantial question of law arises. 7. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE (DAYA CHAUDHARY) August 4, 2009

JUDGE raghav Note: Whether this case is to be referred to the Reporter? ........Yes/No

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