Income Tax Appellate Tribunal - Chandigarh
Bhupinder Singh Chauhan, Yamunanagar vs Assessee on 18 January, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'B' CHANDIGARH
BEFORE Ms.SUSHMA CHOWLA, JUDICIAL MEMBER
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA Nos. 772 & 773/CHD/2004
A.Y. 2000-01 & 2001-02
Shri Prem Chauhan, V ITO, Ward - 2,
Prop. M/s Jai Mata Shimla.
Timber Merchants,
Main Road, Kukunala,
Kotkhai, Shimla.
PAN: -------------
(Appellant) (Respondent)
Assessee by : Shri Tej Mohan Singh
Department by: Smt. Jaishree Sharma
Date of Hearing : 18.01.2012
Date of Pronouncement : 25.01.2012
ORDER
PER MEHAR SINGH, AM
The present two appeals appeal filed by the same assessee have been directed against the consolidated order dated 25.03.2004 passed by the ld. CI T(A) Shimla u/s 250(6) of the Income-tax Act,1961 (in short 'the Act').
2. The facts and the grounds of appeal are identical in both these appeals, therefore, the grounds raised by the assessee in ITA No.772/Chd/2004 (A.Y. 2001-02) are reproduced hereunder:
"1. The ld. CIT(A) has erred in law and f acts of the case by upholding the order of the Income T ax Off icer and holding that f raming of assessment u/s 144 was justif ied and rejecting the ground taken by the assessee.2
2. The ld. CIT(A) has erred in law and f acts of the case by rejecting the assessees' plea that provisions of Section 44AF are not applicable to the assessee and upholding the order of the ITO.
3. The ld. CIT(A) has erred in law and f acts of the case by upholding the action taken by the AO in rejecting the books of account f or the purpose of arriving at the taxable income and relying on the same f or the purposes of making addition u/s 68.
4. The ld. CIT(A) has erred in law and f acts of the case by upholding the addition of Rs.7,50,000/- made u/s
68.
5. The appellant craves leave to add or amend the grounds of appeal bef ore the appeal is heard and disposed off."
3. In Ground No.1, the assessee contended that the CIT(A) erred in law and facts by upholding the order of the I TO and upholding the framing of assessment u/s 144 of the Act. Ld. 'AR' contended that the assessee cooperated in the assessment proceedings but the AO passed assessment u/s 144 of the Act, which is not fair. He referred to para 3 of the order passed by the first appellate authority in respect of this ground of appeal. Ld. 'DR' placed reliance on the order of the AO and of the CIT(A).
4. We have carefully perused the facts of the case, rival submissions and the relevant record available in the matter. The assessee was given ample opportunities to produce the details and documents by the AO. However, it is evident from para 3 of the order passed by the ld. CI T(A), that during assessment proceedings and hearing on 12.12.2002, it was made to understand that the case would be finalized under 3 the provisions of Section 44AF of the Act, consequently, some details called for by the AO vide questionnaire dated 25.01.2002, would not longer be required to be filed and that the assessee should accept the application of provisions of Section 44AF, as there was no cooperation coming from the Accountant of the assessee, the ld. 'AR' agreed that the assessment be framed following provisions of Section 44AF. However, Addl.CIT did not agree to the proposal and further time was not allowed. Consequently, there is no justification in passing ex-parte order. The findings of the ld. CIT(A), in the matter are reproduced hereunder :
"3.1 I have perused the record. It is seen that the appellant was provided several opportunities to comply with the notices issued u/s 143(2)/142(1) of the Act. These opportunities have not been availed of by the appellant. The order sheets sho ws that the assessment proceedings were f ixed f or hearing on 5.2.2002, 20.2.2002, 28.8.2002, 17.9.2002, 24.9.2002, 30.9.2002, 8.10.2002, 21.10.2002, 26.11.2002, 10.12.2002 and f inally on 12.12.2002 which remained uncompl ied with. The appellant was inf ormed on 10.12.2002 that on failure to f urnish the requisite inf ormation, assessment shall be completed u/s 144 of the Act. There was no compl iance on that day. As the appell ant has f ailed to avail of various opportunities provided by the appellant, the ground raised in appeal is devoid of any merits. The AO was lef t with no al ternative but to complete the assessment to the best of his judgment in accordance with the provisions of Section 144 of the Act. In the light of these f acts, the AO is justif ied in f raming the assessment u/s 144 of Income-tax Act,1961. The f irst ground is accordingly, rejected."
5. The ld. CIT(A) perused the order-sheet prepared by the AO which indicated that the assessment proceedings were fixed for 4 hearing on 5.2.2002, 20.2.2002, 28.8.2002, 17.9.2002, 24.9.2002, 30.9.2002, 8.10.2002, 21.10.2002, 26.11.2002, 10.12.2002 and 12.12.2012. As is evident from the perusal of the record, assessee chose not to cooperate in the matter of finalization of assessment proceedings by way of making necessary submission required by the AO. It is settled proposition of law that under any civilized jurisprudence or under the concept of natural justice, endless opportunities to recalcitrant assessee cannot be afforded by the AO and being quasi-judicial authority, he has to complete the assessment proceedings within the parameters of relevant statutory provisions.
6. In view of the above, the AO is helpless in motivating the assessee to attend to the assessment proceedings, by providing endless opportunities. Accordingly, we concur with the findings of the CI T(A) and dismiss this ground of appeal raised by the assessee.
7. The ground No.2 is dismissed as not pressed.
8. In Ground No. 3 & 4, the assessee challenged the upholding of the action taken by the AO in making addition u/s 68 of the Act.
9. We have carefully perused the rival submissions, facts of the case and the relevant records in the matter. The brief facts of the issues are that the AO sought details of unsecured loans to prove the identify and credit-worthiness of the cash creditor and genuineness of the transactions. The assessee was also required to produce a copy of bank account of such creditors. The assessee filed confirmation letters in respect of 5 unsecured loans raised by the assessee. The AO found that such confirmation letters were on assessee's own letterhead in single hand-writing and almost on similar lines. The assessee failed to adduce evidence in respect of identity, credit worthiness and genuineness of the transactions. The AO found that Smt.Phulli Devi, Shri Baragi Ram, Shri Narottam Chauhan, Shri Ram Dewan and Shri Sohan Lal had advanced unsecured loans during the year 1999-2000or 2000-01. However, the exact date and even the year of advancing such loans was not mentioned in the said confirmatory letters. Further, in respect of Shri Ram Lal Chauhan, no confirmation letter was filed. The confirmatory letter filed in respect of Shri Matu Ram revealed that he had advanced unsecured loan to the assessee during the year 199-2000 but the loan amount column was left blank in the confirmatory letter. A perusal of the balance sheet for the assessment year 1999-2000 indicated that said person had advanced Rs.50,000/- during the year 1998-99, which is appearing in the balance sheet filed for the assessment year 2000-01. As the assessee had failed to satisfy the ingredient of Section 68, the AO made the addition of such cash creditors on the ground of failure of the assessee to prove identity, credit worthiness of the creditors and genuineness of the transactions. The following additions were made by the AO "A.Y. 2000-01
i) Smt.Phulli Devi Rs.1,00,000/-
ii) Shri Baragi Ram Rs.3,00,000/-
iii) Shri Ram LalChauhan Rs. 50,000/-
iv) Shri SiriRam De wan Rs.1,00,000/-
v) Shri Narottam Chauhan Rs.1,00,000/-
6
vi) Shri Sohan LalChauhan Rs.1,00,000/-
Total Rs.7,50,000/-
A.Y. 2001-02
i) Shri Ramesh Kumar Rs. 40,000/-
ii) Shri Moti Ram Rs. 85,000/-
Total Rs.1,25,000/-"
10. During the course of present appellate proceedings, ld. 'AR' failed to adduce any evidence satisfying the statutory ingredients embedded in the provisions of Section 68 of the Act. Ld. 'AR' stressed on the ownership of land holding by such creditors, which cannot be accepted as proof of financial capacity and credit worthiness of such creditors to advance such loans. Requisite evidences were not filed by the assessee before the AO, CIT(A) and even before the Bench to prove his case.
11. The burden of proof has two shades of meaning. In its primary sense, it means the burden of establishing the case. Second meaning of 'burden of proof' is on the principle of evidence. In the second sense, the burden would be shifted from one party to the other as and when adequate evidence to discharge the burden that lay on a party is adduced by the party.
12. The burden of proof is embedded in the statutory provisions of Section 68 of the Act and cast on the assessee. However, the statutory explicit proposition is supported by judicial verdicts that it is incumbent on the assessee to explain the nature and source of the creditors appearing in the books of account. The jurisdictional High Court as well as Hon'ble 7 Supreme Court has laid down such proposition in the following cases :
i) Roshan Di Hatti V CI T 107 I TR 938
2. Kalekhan Mohammad Hanif V CI T, 34 I TR 807
3. Devi Parsad Vishvanath Parsad 72 ITR 194 (S.C)
4. Sethi Cotton Traders 286 ITR 548 (P&H)
5. CIT V P.Mohanakala 291 ITR 278 (S.C)
6. Jaspal Singh V CI T 290 I TR 306
7. Teerath Ram Gupta V CI T 304 I TR 145
8. Yashpal Goyal 310 ITR 75
9. Sumati Dayal V CIT (1995) 214 ITR 801 (S.C) 12(1) The Hon'ble Supreme Court, in the case of Sumati Dayal (supra) on the issue of burden of proof held as "It is true that even af ter rejecting the explanation given by the assessee, if f ound unacceptable, the crucial aspect whether on the f acts and circumstances of the case, it should be inf erred, the sums credited in the books of the assessee constituted income of the previous year against receipt consideration of the parties, provided the assessee rebut the evidence and the inf erence drawn to reject the explanation offered as unsatisfactory. We are required to notice that Section 68 of the Act itself provides, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income tax as income of the assessee of the previous year, if the explanation offered by the assessee about the nature and source of such sums found credited in the books of the assessee, is in the opinion of the AO, is not satisfactory. Such opinion formed, itself constitutes 8 the prima facie evidence against the assessee, viz, the receipt of money, and if the assessee fails to rebut the said evidence, the same can be used against the assessee by holding that it was a receipt of an income nature".
13. In the present case, the assessee has failed to discharge even the prima-facie onus cast on him by the statutory provisions of Section 68 as also by the ratio laid down in the above cited cases. The AO, as well as CI T(A), has discussed in detail, each cash creditor in the light of the onus cast on the assessee in the matter and found the failure of the assessee to discharge primary onus cast on him. The provisions of Indian Evidence Act also support the rule of evidence embedded in the provisions of Section 68 of the Act. Under Section 160 of the Evidence Act, it is contemplated that when any fact is, specially within the knowledge of any person, the burden of proving the fact is upon him. The AO as well as ld. CIT(A) has provided ample opportunities to the assessee to prove the transactions of cash credits in the light of the provisions of Section 68 of the Act. However, the assessee failed to adduce cogent, credible and plausible evidence to prove his case. The Hon'ble Supreme Court in the case of P.Mohanakala (supra) held that the Expression "assessee offers no explanation"
means, where no proper, reasonable and acceptable explanation as regards to the sum credited in the books of account of the assessee was offered. In the light of such judicial definition of the phrase, the assessee has failed to offer any proper and reasonable and acceptable explanation in the matter under reference.9
14. The principle of natural justice embedded in the latin maxim "Audi Alteram Partem" means that a person has a right to be granted an opportunity of being heard which should be adequate and reasonable so as to enable the person to meet case against him. It is inherent in the concept of natural justice that it cannot be stressed by a pedantic approach and must be guided and goaded by a rational, pragmatic and common sense approach. It is impossible to endlessly motivate the assessee by way of providing endless opportunities, to avail of the opportunities as it would lead to subversion of concept of natural justice. We are in complete agreement with the findings of the ld. CI T(A) as the same are detailed, well reasoned and based on the legal and factual position of the case. It is pertinent to reproduce the relevant part of the findings of the CIT(A) in the matter "5.1 In my considered view, there is no infirmity in the approach of the Assessing Officer. The Assessing Officer has framed best judgment assessment applying the net profit rate of 5% adopting the sales figures disclosed by the appellant. As the books of accounts were never produced before him, there was no occasion for him to examine or reject them. As the balance sheet showed various creditors, the Assessing Officer is justified in examining the credits and in case these are found to be non genuine, he is justified in making addition u/s 68 of the Act. The next ground relates to addition of Rs. 7,50,000/- and Rs.1,25,000/-made by the Assessing Officer in A.Y. 2000-01 and A.Y. 2001-02 respectively under Section 68 of the Act in respect of unsecured loans raised from relatives and friends. It is submitted that the assessee has borrowed funds from his father and other relatives for his business, which are duly shown in the balance sheet. The A.O. has doubted the genuineness of the same and has added the amount by treating them as income from undisclosed sources u/s 68 of the Income Tax Act. It is submitted that all the persons are agriculturists and are having agricultural income of their own and have advanced money to help the assessee, who started his business about 2 years back. The credit entries can be explained and credit worthiness proved, if the 10 assessee is given sufficient time to explain. The appellant has produced four creditors i.e. Smt. Phuli Devi, Shri Narotam Chauhan, Shri Sohan Lal and Shri Ram Dewan and filed their revenue papers to show that they are agriculturists. It is submitted that they have already filed their confirmations before the Assessing officer. Shri Baragi Ram, father of the assessee, could not beproduced, as he expired in December, 2003. Papers regarding his land holdings have been filed. Shri Ram Lai Chauhan, who has given the money by cheque, could not be produced orTtheTast hearing date as dueto his prior engagement, he was not^ayailable Jn Shimla. The amount has been received by cheque, drawn on UCO Bank, Kotkhai on 21.03.2000 which was deposited by the assessee in his personal account with HP State Co-operative Bank Ltd. Kotkhai. 6.1 It is further submitted that in the original statements furnished before the Assessing officer, there was a mistake on the Liabilities side. The bank balance of SBI Kotkhai CC A/c has been taken as Rs.1,96,921/-, whereas it should have been Rs.2,96,921/-. To support this, a photostat copy of the bank statement has been filed. Similarly, the amount of Rs. 1,00,000/- shown against Shri Ram Dewan has been wrongly included in the Balance Sheet as on 31.03.2000 as the amount from him was taken by cheque in January, 2001, i.e. in the next year. 6.2 As regards loans raised during A.Y. 2001-02, following details have been submitted.
Sri Ram Dewan: The amount of Rs. 1,00,0007- has been received by 2 cheques of 50,0007- each from UCO bank Gumma and deposited in appellant's S.B. account. An amount of Rs. 99,7557- has been credited and Rs.2457- has been debited as bank charges.
Ramesh Thakur: Cheque drawn on Shimla Urban Co-op. Bank deposited in PNB, Shimla & cash withdrawn from SB A/c 62618 Shimla encashed at Shimla.
Moti Lai/Ram: Paid by Ch.No. 099474 of UCO Bank, Kotkhai. The amount was deposited in SB A/c of the appellant on 7.2.2001. 6.3 As the additions have been made ex parte on the ground that the identity and capacity of the creditors had not been proved and hence genuineness of the transaction was not established, the appellant was asked whether he could produce the creditors for examination. As the appellant offered to produce the witnesses and the relevant evidence, the matter was remanded to the Assessing Officer for verification. The Assessing Officer 11 accordingly required the assessee to produce evidence in respect of cash credits on 30.10.2003. A request was received from the assessee for adjournment on the ground that the time to produce the creditors was short. The appellant's counsel also sought time, as he was busy in solemnization of his son's wedding. The Assessing Officer therefore fixed the case for 17.11.2003. Thereafter at the request of the appellant, case was adjourned to 5.12.2003, 17.12.2003, 29.12.2003, 15.01.2004 and 21.11.2004. On none of these dates any evidence has been filed by the appellant. Thus, in spite of ample opportunity provided to the appellant during original assessment proceedings and subsequently when the matter was remanded, no evidence has been produced in support of loans taken by the appellant. On 10.3.2004,l afforded final opportunity to the appellant to produce the_creditors before me and the case was adjourned to 18.3.2004. The appellant's AR was asked to produce documentary evidence in support of the creditworthiness of the creditors on that date. The appellant produced Shri Sohan Lal, Smt.Phulli Devi, Shri Narottam Chauhan and Shri Siri Ram on 18.3.2004. None of these persons persons produced any evidence regarding sale of agricultural produce or the relevant Girdawari record showing crops grown on the land. Shri Sohan Lal stated that he owns 7 bigha of land whereas the confirmation filed before the Assessing Officer claims him to be owner of 16 bigha of land. He could not explain why wrong facts were mentioned in the confirmation letter. In my considered view, it is almost impossible for a person who owns'7 bigha of agricultural land to advance interest free loan of Rs. 1,00,000/-. He is not even aware of the date when the loan was given. Thus, the credit of Rs. 1,00,000/-
claimed to have been received from Sh. Sohan Lai is unexplained and the addition is confirmed.
6.4 As regards the loan of Rs.1,00,000/- from Sh. Narottam Chauha, he stated that he does not maintain any bank account and there was no record to prove that loan was given. The exact date on which loan was advanced was not known. In the confirmation letter filed before the Assessing Officer, he claims to be owner of 10-12 bigha of land and Rs. 1,00,000/- was given as interest free loan to the appellant out of sale of agricultural produce. The appellant has produced before me a copy of his Kisan Pass Book as per which only about 0-56-96 hectares is faldar land. In my considered view, the appellant cannot earn sufficient income from the small piece of land to enable him to advance Rs. 1.00 lac as interest free loan to the appellant. Sh. Narottam Chauhan has failed to produce any evidence to support that he could earn sufficient income by sale of agricultural produce to enable him to advance Rs. 1.00 lac to the appellant. Keeping in view these facts/the loan of Rs. 1.00 lac claimed to have been 12 received from Sh. Narottam Chauhan Jemains unsubstantiated and accordingly addition of Rs. 1.00 lac is confirmed. 6.5 As regards loan of Shri Siri Ram Dewan, it is stated that the amount has been advanced by two cheques dated 07.02.2001 for Rs.50,000/- each. However, Shri Siri Ram did not produce any evidence to prove the source of Rs.1.00 lac advanced to the appellant. Even the bank pass book has not been produced. Thus, the source of Rs.1.00 lac claimed to have been received from Shri Siri Ram remains unsubstantiated. He has also not produced any evidence regarding sale of crops. Simply on the basis of copy of kisan pass book showing ownership of land amounting to 0-26-61 hectares, it cannot be inferred that Shri Siri Ram Dewan had capacity to advance the loan of Rs.1.00 lac. The addition of Rs.1.00 is accordingly confirmed.
6.6 A sum of Rs. 1 .00 lac is claimed to have been received from Smt. Phulli Devi:" Igfthe confirmation letter filed before the Assessing Officer, she has mentioned that |Sffas advanced Rs. 1.00 lac out of her agricultural income earned from about 12 bigha of agricultural land. Smt. Phulli Devi was produced before me but she did not file any evidence regarding ownership of agricultural land, sale proceeds of agricultural produce, if any, or any other evidence in support of the claim that a sum of Rs. 1 .00 lac has been advanced by her. Thus, the source of Rs. 1 .00 lac has not been substantiated and the addition of Rs. 1.00 lac is confirmed 6.7 As regards Rs. 3.00 lacs from Sh. Baragi Ram, it is submitted that he has expired. As per the confirmation letters filed he, has advanced Rs. 3.00 lacs as interest free loan in cash during F.Y. 1999-2000 and 2000-01. The exact date and the amount has not been specified. On perusal of the documents regarding ownership of agricultural land, it is seen that a major portion of the land is ghasni. The appellant's AR was asked to file documentary evidence in respect of crops grown such as girdawari record and evidence regarding sale proceeds of agricultural crop. But no such document has been filed. Thus, the appellant has failed to prove that Sh. Baragi Ram had capacity to advance loan of rs. 3,00,0007-. In view of these facts, Assessing Officer is justified in holding Rs. 3.00 lacs credited to appellant's account as unexplained cash credit and the addition is confirmed.
6.8 As regards Rs. 50,0007- received from Sh. Ram Lai Chauhan, position is similar. No evidence has been filed regarding source of Rs. 50,0007- 13 advanced to the appellant. Sh. Ram Lai has also not been produced before me or the Assessing Officer.
6.9 During the period relevant to A.Y. 2001-02, appellant has shown loans from Sh. Ramesh Kumar and Sh. Moti Ram. None of these persons have been produced in spite of sufficient opportunities provided by the Assessing Officer. The confirmation letter filed before the Assessing Officer shows a credit of Rs. 0,000/- by Sh. Moti Lai Chauhan where as the balance sheet shows a credit of Rs. 85,0007- in the name of Sh.Moti Ram Chauhan. This fact has not been clarified whether tha loan advanced amounted to Rs.80,000/- or Rs. 85,0007- and whether Sh. Moti Ram and Sh. Moti Lai are one and the same person. Similarly, Sh. Ramesh Kumar has not been produced before me and even the confirmation letter from Sh. Ramesh Kumar is missing.
6.10 It is well settled that the primary onus lies on the assessee to prove the nature and source of the credits. It is necessary for the assessee to prove prima facie the identity of his creditors, the capacity of such creditors to advance the money and lastly the genuineness of the transactions. Only when these things are proved by the assessee prima facie and only after the assessee has adduced evidence to establish the aforesaid facts, the onus shifts on to the Department. It is not enough to establish the identity of the creditors. Mere production of the confirmation letters before the Income-tax Officer would not by itself prove that the loans have been obtained from those loan creditors or that they have credit-worthiness. In the present case, the assessee tried to explain their creditworthiness on the basis of ownership of land. No evidence is produced against income generated from such land and whether after meeting their personal expenses; they could advance interest free cash loans. None of the creditor is aware of the dates when the loan was advanced and has no idea when the amount will be received back. The creditors produced before me, do not appear to be worthy of advancing cash loans to the extent claimed by the appellant. Several opportunities have been afforded to the appellant in this case but hardly any evidence has been produced in support of the creditworthiness of the creditors. Keeping in view these facts, in my considered opinion, the AO is justified in taxing cash credits of Rs.7.50 lacs and Rs. 1.25 lacs, as discussed above u/s 68 of Income Tax Act, 1961.
7. With regard to agricultural income, it is submitted that the assessee is an agriculturist and has vast lands in his name. This is not the first year when the 14 assessee has declared agricultural income. The income declared in various assessment years are as follows: -
1998-99 2,75,000/-
1999-00 2,20,000/-
2000-01 1,50,000/-
2001-02 2,83,000/-
2002-03 1,80,000/-
As the assessee has been frank in admitting that he has not maintained any agricultural operations, the AO has considered the agricultural income as income from other sources. In what manner details of agricultural income are to be maintained, to prove its genuineness, has not been given by the Assessing Officer. The assessee is getting payments by drafts from the places where he is sending his goods for sale and the same are being deposited in his bank account. As regards agricultural income of Rs 1,50,0007- shown by the assessee in A.Y.2000-01, it is stated that this money has not been introduced in the accounts of the assessee. A copy of Kisan pass book is filed to show that the assessee is an agriculturist and holds vast lands. It is submitted that the produce was sold at the fields only and money received in cash.
7.1 As regards the addition of Rs. 1,50,0007- in A.Y. 2000-01 and Rs. 2,83,0007- in A;Y. 2001-02, the appellant has submitted that he is an agriculturist owning substantial agricultural land. He has not maintained any account. As per documents submitted, he has 0-3654 sq. mts. of agricultural land used as 'bagitcha'. As per documents filed for A.Y. 2001-02, he has received a sum of Rs. 1,71,785/- on sale of apple. It is further submitted Rs. 80,000/- and Rs. 30,0007- were received on sale of potatoes and pees in cash for which no documents are available. Thus, even as per assessee's submissions, there cannot be net income of Rs. 2,83,000/- during A.Y. 2001-02. As regards A.Y. 2000-01, no evidence regarding sale proceeds of crop has been furnished. Considering these documents and the expenses which would have been incurred in earning the income and the past record of the assessee, in my considered view, the agricultural income of the assessee can be estimated at Rs. 1,50,000/-.Accordingly, the addition of Rs. 1,50,000/- in A.Y. 2000- 01 stands deleted and addition of Rs. 2,83,000/-in A.Y. 2001-02 is reduced to Rs. 1,33,000/."
15. We have carefully considered the submissions made by the assessee vide letter dated 25.11.2011 and found that the affidavits filed remain patently uncorroborated in the absence of supporting evidences, justifying the deposition made in the said 15 affidavits. Consequently, such self-serving affidavits cannot be taken as establishing the case of the assessee, credit worthiness and genuineness of the cash credits, within the meaning of the provisions of Section 68 of the Act. The Hon'ble Madhya Pradesh in the case of Gunwanti Bai V CIT (1983) 12 Taxman 86 (MP) and Hon'ble Allahabad High Court in the case of Sri Krishna V CIT 142 ITR 618, while distinguishing the case of Hon'ble (S.C) on the sanctity of affidavit as evidence, in the case of Mehta Parikh Co. V CIT (1956) 30 ITR 181 (S.C) has held as under :
"It is neither a rule of prudence nor a rule of law that the statements made in an affidavit which remains uncontroverted, must invariably be accepted as true and reliance. Ordinarily, in the absence of denial, the statements may be accepted as true but if there are circumstances which suggest that the statements on affidavit should not be accepted as true, the absence of denial by the other side, would not by itself be sufficient to clothe the statements on affidavit with truthfulness and reliability."
16. In view of the above legal and factual discussions, we do not find any infirmity in the findings of the ld. CIT(A) and hence, the same are upheld.
17. In the result, the appeals of the assessee, in both the cases i.e. ITA No. 772 & 773/Chd/2004, are dismissed.
Order pronounced in the Open Court on 25 th Jan.,2012.
Sd/- Sd/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25 th Jan.,2012 'Poonam' Copy to:
The Appellant, The Respondent The CIT(A), The CIT,DR Assistant Registrar, ITAT Chandigarh