Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1981-82 - During assessment proceedings it was revealed that assessee-firm had paid certain amount by way of 'pagri' for acquiring shop premises on rent - 'B', who was partner of firm which was previously in possession of said property, admitted that an amount had been paid by assessee to his wife 'V' in lieu of handing over possession of premises in question - Landlord also admitted to receive an amount by way of pagri - Income-tax inspector prepared a report and ITO added amounts paid by assessee to 'V' and landlord as unaccounted income of assessee - Whether affidavit of 'V' denying receipt of pagri which was belatedly produced by assessee was obviously an afterthought to bolster up assessee's case and could not dislodge reliable version of 'B' - Held, yes - Whether, therefore, addition was to be sustained - Held, yes FACTS During the assessment proceedings, it was revealed that for acquiring the business premises on rent, the assessee-firm had paid certain amount by way of 'pagri'. The landlord admitted to have received an amount from the assessee. Further, 'B' who was one of the partners of the firm which was in possession of said premises for nearly 25 years, stated that the assessee had given Rs. 1 lakh for handing over possession of the premises to 'V', his wife. 'B' further stated that a total amount of Rs. 1,20,000 was received from the assessee out of which the amount of Rs. 20,000 was paid by cheque towards cost of furniture and that a sum of Rs. 40,000 was given by the assessee to the landlord for the premises. At the request of the assessee, copies of the statements of the landlord were furnished to the assessee. The ITO noted that the statement of 'B' that a cheque of Rs. 20,000 was given by the assessee towards furniture was borne out from the assessee's own books of account. The ITO, therefore, added Rs. 1 lakh paid by the assessee to 'V' and Rs. 40,000 paid to the landlord as the unaccounted income of the assessee, since it was not entered in the books of account of the assessee. In appeal, the Commissioner (Appeals) deleted the addition by observing that the…

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