Law:

Section:

Section 143 of the Income-tax Act, 1961 [Corresponding to section 23(3) of the Indian Income-tax Act, 1922] - Assessment - Addition to income - Assessment year 1945-46 - Tribunal held that amount allegedly advanced by assessee to his relative as evidenced by squared up account without charging any interest thereon resulted in some profit to assessee from use of said money in relative's business and hence assessable as his income - Whether in absence of any evidence at all to connect assessee with business of his relative there was no material before Tribunal to conclude as above - Held, yes FACTS The assessee was carrying on business in cloth. The assessee's sister was married to one 'P'. The ITO on examining the books of accounts of the assessee found that there was a squared-up account in the name of the said 'P' with debits and credits totalling Rs. 28,200. The assessee was asked to explain the debits and credits in the account of 'P' in its books of accounts. 'P' was produced and his statement recorded by the ITO. 'P' admitted that there were many transactions between him and his brother-in-law during the relevant accounting year. In support thereof he produced his cash book. On basis of said cash book of "P", the ITO concluded that the said sum represented artificial receipts from a source not disclosed to the department and brought the entire sum to tax as income of the assessee from business. Appeal of the assessee before the AAC and the Tribunal was failed. On reference : HELD There was no doubt that there were grounds for suspecting the genuineness of the cash book produced but it was absolutely incorrect to suggest that the cross-examination of 'P' revealed that the cash book was maintained with the sole idea of helping the relation as there was nothing in the statement to warrant such a presumption. The AAC, however, after correcting the ITO himself fell into the error of surmising that, as no interest was charged by the assessee on the said sum of Rs. 28,200, given for temporary use of four months to his brother-in-law, the assessee had some share in the business carried on by 'P'. In other words, he was of the view that the assessee could not have…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492