Law:

Section:

Section 254, read with section 68 of the Income-tax Act, 1961 - Appellate Tribunal - Order of - Whether where in coming to conclusion that assessee had failed to prove sources of cash credits in names of 'D' and 'S', Tribunal did not consider their statements recorded before AAC, order of Tribunal was vitiated on account of non-consideration of such evidence - Held, yes FACTS The Tribunal held that the assessee had failed to prove the source of the cash credits standing in the names of 'D' and 'S'. On reference, the assessee contended that in coming to the said conclusion the Tribunal had not considered their evidence before the AAC and, hence, the order of the Tribunal was vitiated. HELD It was found that in the statement before the AAC, 'D' had stated that he had deposited a sum with the assessee as he was contemplating the marriage of his daughter and that the marriage took place in May, 1963. This part of the statement of 'D' had been completely lost sight of by the Tribunal. Further, the AAC had stated in his order that 'S' was a widow and was living with her father, that she loaned a sum and that the subsequently withdrew that amount from the assessee. This part of her statement had also not been considered by the Tribunal. Thus, it was clear that the Tribunal had not considered the statements of 'D' and 'S' recorded by the AAC. As such statements constituted material evidence in favour of the assessee, the appellate order of the Tribunal was vitiated by non-consideration of material evidence. Note: The decision was in favour of the assessee. JUDGMENT D. M. Chandrashekhar, J.-At the instance of the assessee, the Income-tax Appellate Tribunal, Allahabad Bench (shortly called "the Tribunal"), has referred to this court under section 256 of the Income-tax Act, 1961 (shortly called "the Act"), the following questions of law : "1. Whether, in coming to the conclusion that the assessee has failed to prove the source of cash credits standing in the name of Daya Shanker and Sundera Devi, the Tribunal has considered the evidence of Daya Shanker and Sundera Devi recorded by the Appellate Assistant Commissioner, if not, whether the appellate order is vitiated…

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