Commissioner of Income Tax vs Santosh Kumar Shyamsunder

A.K. Mathur, C.J.—This is a reference u/s 256(1) of the income tax Act, 1961 (''the Act'') at the instance of the revenue and the following question of law has been referred by the Tribunal for opinion of this Court: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the acceptance/surrender/assessment of the impugned amount in the hands of creditors would justify the deletion of the amount of Rs. 53,000 from the assessment of the assessee-firm in these books of account cash credits appeared ?

The brief facts giving rise to this reference are thus: The partners of the two firms were inter-related. The cash creditors were also related to these partners. The ITO found the following cash credits in the books of the firm Sureshchand Santosh Kumar:

Sl. No.

Name

Date

Amount Rs.

(1)

ShriBrijkishoreAgrawal

20-11-1974

6,000

(2)

ShriSubhashchandAgrawal

"

5,000

(3)

ShriBrijmohanAgrawal

"

6,000

(4)

ShriBhiharilalAgrawal

"

9,000

(5)

ShriPawan Kumar Agrawal

"

10,000

(6)

ShriVinod Kumar

"

8,000

(7)

ShriGarsilalAgrawal

"

9,000

On scrutiny, the ITO further found that these credits had appeared in the books of Santosh Kumar Shyamsunder (''the firm'') on 16-11-1974. The cash creditors withdrew the above amounts from the second firm on 17-11-1974, 18-11-1974 and 19-11-1974 and deposited the said amounts with the first firm on 20-11-1974. As the cash creditors could not explain the nature and source of these amounts, they surrendered these amounts in their assessments wherein these were assessed on protective basis. This total amount of Rs. 53,000 was also added in the hands of the second firm on protective basis. The ITO did not accept the contention of the first firm that no addition should be made as this amount has been surrendered by and was assessed in the hands of the cash creditors. As such, the ITO added this amount in the hands of the first firm.

Aggrieved by the order of the ITO, the assessee preferred an appeal before the AAC, and the AAC deleted the addition in the hands of Santosh Kumar Shyamsunder. Against this order, an appeal was preferred by the department before the Tribunal and the same was dismissed by the Tribunal affirming the order of the ITO. We have heard the learned counsels for the parties and perused the record. We find that this is purely a question of fact; therefore, no question of law arises. Factually, it is the concurrent finding of fact of both the authorities below and nothing survived in this matter. There is no question of law involved in this case. We are satisfied that the question of fact has correctly been decided, therefore, we answer the aforesaid question in favour of the assessee and against the department/revenue.