Law:

Section:

Section 256, read with section 254, of the Income-tax Act, 1961 - Reference - Question of fact - Assessment year 1977-78 - ITO while completing assessment found that assesses had invested certain amount in purchase of plot and construction of house - Assessee's explanation that he invested his savings and raised certain loans from one G and S was and not accepted by ITO, who made necessary additions in assessee's total income - On appeal, AAC while modifying ITO's order, held that loan advanced by 'S' was established while loan alleged to have been advanced by 'G' was not proved as genuine - On second appeal, assessee's only contention that he had not been given proper opportunity to produce evidence in respect of loan advanced by G was rejected by Tribunal on ground that such a contention was not only not raised before AAC but was falsified by record - Whether Tribunal's finding was purely a finding of fact and no referable question of law arose - Held, yes Facts For assessment year 1977-78, while framing the assessment, the ITO found that the assessee had invested certain amount in the purchase of a plot and the construction of a house thereon. The assessee explained that he had invested his own savings and had raised loans from one G and S. The ITO did not accept the assessee's explanation and added the amount to his total income. On appeal, the AAC accepted the assessee's contention in respect of the loan raised from S but held that the amount of loan alleged to have been advanced by one G was not proved to be genuine. On second appeal, the assessee contended before the Tribunal that he had not been given a proper opportunity to produce evidence in respect of the loan advanced by G. The Tribunal held that no such grievance was made by the assessee before the AAC, and that from the material on record, the genuineness of cash credit was not established, He, therefore, not only upheld the order of the AAC, but also refused to make reference under section 256(1). On an application under section 256(2) : Held The question as to whether proper opportunity was or was not given to the assessee to produce the creditor, was a question of fact. The Tribunal rejected…

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