Law:

Section:

Section 68, read with section 256, the Income-tax Act, 1961 - Cash credits - Certain deposits in assessee's books were treated as its income from undisclosed sources - Also there was discrepancy in its balance sheet which led to inclusion of excess of assets over liabilities in its income - Assessee did not produce any evidence to prove genuineness of said entries - Tribunal had also found that assessee had forged its accounts - Whether on facts, application for making reference to High Court was to be dismissed - Held, yes FACTS Certain deposits in the assessee's books were treated as assessee's income from undisclosed sources. Besides, there was discrepancy in the balance sheet which led to inclusion of excess of assets over liabilities in the assessee's income. This was confirmed by Tribunal. On application under section 256(2), the assessee contended that though he did not produce any evidence in support of his contention before the ITO, the appellate authority ought to have allowed him an opportunity to produce evidence. HELD In the first appeal, no written application was made nor was any affidavit filed by the assessee showing sufficient cause for his inability to produce the material before the ITO. Indeed, the request was that the appellate authority should summon the evidence under sub-rule (4) of rule 46A. The first appellate authority refused to do this. In spite of this, no written application supported by affidavit was filed even before the Tribunal. The Tribunal also found that the first appellate authority was not in error in not summoning additional evidence. All the findings of the Tribunal were against the assessee, one of the findings was that the he had forged in accounts. The application for reference was, therefore, dismissed. Note : The decision is in favour of the revenue. Vikram Gulati for the Applicant. JUDGMENT B.P. Jeevan Reddy, C.J-Through this application under section 256(2) of the Income-tax Act, 1961, the assessee is asking this court to direct the Income-tax Appellate Tribunal to refer the following questions: "(1)Whether the Tribunal was justified in law in treating a sum of Rs. 35,000 as the assessee's income which was a…

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