SHRI PARSWANATH GRANITE INDUSTRIES (P) LTD. vs Commissioner of Income Tax

BY THE COURT

This reference application u/s 256(2) of the Income Tax Act is at the instance of the assessee Shri Parshwanath Granite Industries (P) Ltd. The assessee is a private limited company, engaged in the business of manufacturing granite slabs out of granite stone blocks and purchase and sale thereof. The assessing officer while completing the assessment proceedings for the assessment year 1988-89, disallowed cash credit of Rs. 43,000 in the name of Miss Pramila and Rs. 17,000 in the name of Mr. Suresh Kumar Golecha. The assessing officer examined Miss Pramila, the daughter of managing director of the company. She pleaded complete ignorance about the deposit in her bank account as well as the credit advanced to the assessee. The assessee requested for the cross-examination of Miss Pramila. The summonses were issued to her u/s 131 of the Income Tax Act. In spite of repeated opportunities given, Miss Pramila did not appear. It goes without saying that it was the assessee, who could have produced Ms. Pramila. Since the assessment proceedings were getting barred by limitation, the assessing officer completed the assessment on 22-3-1991. Similarly, Suresh Kumar Golecha son of the director of the company was also not produced before the assessing officer. Thus, the genuineness of the credit standing in the name of Suresh Kumar Golecha could not be examined and the assessee failed to discharge the onus cast upon him. In view of this, the assessing officer added both the cash credits as not proved. The finding has been confirmed by the Commissioner (Appeals) as well as by the Tribunal.

It is contended by Mr. Rajendra Mehta, learned counsel for the applicant-assessee that the assessing officer has committed error in relying on the statement of Ms. Pramila at the back of the assessee for the purpose of making addition in the income showed by him. The genuineness of a credit is a question of fact and on the facts, it cannot be said that there was unconvincing material to establish the genuineness of such credits. In our view, no referable question of law arises from the order of the Tribunal.

Accordingly, the reference application is rejected.

OPEN