Allahabad H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in drawing an adverse inference and in sustaining the addition of Rs. 39,200 on the finding that the assessee had failed to fulfil the undertaking to produce M/s Chaman Lal Dalbir Singh notwithstanding the changed circumstances that the said dealer had shifted to Kashmir and failure of the authorities below to issue commission or summons for the examination of M/s Chaman Lal Dalbir Singh for which the assessee had made specific request ?

Counsel Appeared

V. Gulati, for the Assessee : Standing Counsel, for the Revenue

O.M. PRAKASH, J.:

This is an application under s. 256(2) of the IT Act, 1961, by the assessee for asking the Tribunal to state the, case on the following questions : ” (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in drawing an adverse inference and in sustaining the addition of Rs. 39,200 on the finding that the assessee had failed to fulfil the undertaking to produce M/s Chaman Lal Dalbir Singh notwithstanding the changed circumstances that the said dealer had shifted to Kashmir and failure of the authorities below to issue commission or summons for the examination of M/s Chaman Lal Dalbir Singh for which the assessee had made specific request ? (ii) Whether, on the facts and in the circumstances of the case, the authorities below should not have issued summons to Delhi party specially when his address as well as his control licence was made known by the appellant and also because the appellant had agreed to bear all the expenses in this regard ? (iii) Whether, on the facts and in the circumstances of the case, the assessee could not have been said to have discharged his initial burden and whether the ITO was justified in not summoning the parties concerned if he was not satisfied about the genuineness of the fixed deposit receipts ? (iv) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the above amount of Rs. 39,200 could be recorded as unexplained investment and added as income in the hands of the assessee and is there any material on record for such a finding ? (v) Whether the Tribunal was right in recording the finding that there was no evidence that the assessee’s mother possessed jewellery and she had given jewellery to the assessee to the exclusion of other brothers and whether there is any material on record to score such a finding ? (vi) Whether the Tribunal was right in taking the view that the assessee had not proved the factum of sale of jewellery or had not produced any evidence in regard thereto and had failed to discharge the onus as the source from which the fixed deposits were purchased and whether for all these findings there is any material on record and whether the findings recorded by the Tribunal are contrary to the evidence on record and are based on surmises and conjectures ? (vii) Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the sum of Rs. 39,200 being the investment in the name of the members of the family was income liable to assessment in the hands of the assessee as income from other sources and whether such findings are not contrary to the evidence on record and are, therefore, vitiated by irrelevant considerations ? “

2. The assessee purchased certain fixed deposit receipts and he was called upon by the assessing officer to explain the investment made therein. The case of the assessee was that he acquired jewellery from his mother on partition, the sale proceeds of which had been invested by him in fixed deposit receipts aggregating to Rs. 39,200. The assessee had led evidence to explain the source of the investment but that evidence was disbelieved by the assessing officer. The assessee appealed before the CIT but failed.

3. Then the assessee carried the dispute to the Tribunal. One of the reasons to disbelieve the assessee’s case was that he failed to produce the purchasers, namely, M/s Chaman Lal Dalbir Singh (hereinafter referred to as ” the purchaser “), to establish the fact that he had sold jewellery to the purchaser and the sale proceeds had been invested in the fixed deposit receipts. The assessee had given an undertaking before the Tribunal that he would produce the purchaser before the assessing officer. Having acted upon this undertaking of the assessee, the Tribunal set aside the assessment order and remanded the case to the assessing officer with a direction that after giving an opportunity to the assessee to produce the purchaser, he shall make the assessment order afresh.

4. The assessee failed to carry out the undertaking and to produce the purchaser before the assessing officer. The assessee addressed a letter (annexure VII to the instant application) to the assessing officer (pages 58-59 of the paper book) requesting that : ” …… Your good self your counterpart in Srinagar or in Delhi may enquire about it because the party has got Central Excise Registration and they must have been on their scroll, and they must have given you the correct address at Srinagar. We are ready to deposit the expenses on it. “

5. No summons were issued by the ITO pursuant to the request of the assessee

6. On these facts, learned counsel for the assessee urges that questions of law arise, inasmuch as the ITO failed to issue summons to the purchaser to appear before him.

From the portion of the letter (annexure VII), above reproduced, it is amply clear that the assessee requested the assessing officer to ask his counterpart at Srinagar to locate the purchaser and that shows that the assessee was not in possession of the address of the purchaser. The case of the assessee is that after having given the undertaking to the Tribunal, he went to Delhi to contact the purchaser, but then he was told that the purchaser had shifted to Srinagar. Since the assessee undertook to produce the purchaser before the assessing officer, the onus was on him to produce the purchaser before the assessing officer. He might have at the most sought the assistance of the assessing officer to force the appearance of the purchaser in case the latter was reluctant to co-operate with the assessee and in that event the assessee must have furnished the complete address of the purchaser to the assessing officer and must have taken full steps to summon him. Instead of doing that, the assessee requested the assessing officer to locate the purchaser first. On these facts, it cannot be said that the assessing officer failed to issue summons illegally. Had the assessing officer failed to issue summons to the purchaser, after the complete address of the purchaser having been furnished to him and full steps having been taken by the assessee in this regard, then only the assessee could have urged that the assessing officer had abdicated his jurisdiction illegally and that gave rise to a question of law. But on the facts and circumstances of the case, there was no duty on the assessing officer to issue summons, inasmuch as the assessee failed to furnish the address of the purchaser to the assessing officer. Therefore, the questions proposed by the assessee do not arise.

The application is accordingly rejected.

[Citation : 171 ITR 694]