High Court Of Chhattisgarh
CIT vs. Chandulal Chhugani
Section 69
I.M. Quddusi & N.K. Agarwal, JJ.
IT Appeal No. 162 of 1999
12th August, 2010
Counsel appeared :
Rajeev Shrivastava, for the Appellant : Ashok Patil, for the Respondent
ORDER
I.M. Quddusi, J. :
This income-tax appeal under s. 260A of the IT Act, 1961 (for short ‘the Act’) preferred by the appellant Revenue against the order of the Income-tax Appellate Tribunal, Nagpur (for short ‘the Tribunal’) has been admitted on 19th June, 2009 on the following substantial question of law :
“Whether on the facts and circumstances of the case, the learned Tribunal was legally justified in deleting the addition of Rs. 3 lac made by the AO on account of unexplained investment in Hundies as undisclosed income ?”
Brief facts of the case are that a search and seizure was conducted in the residential and business premises of the respondent-assessee. A notice was issued to the assessee to explain the loose papers, documents, books of account and other valuable assets found and seized. Statement of the respondent-assessee was recorded during the search. The AO noted that during the course of initial statement, the assessee had not disclosed ownership of the locker with the Punjab National Bank and the said fact came into notice of the appellant Revenue subsequently. The said account (sic—locker) was opened and Hundies and FDRs worth Rs. 18,35,000 were found. The assessee admitted that source of investment on Hundies and FDRs is out of the concealed income and offered for taxation. During the course of hearing, the assessee submitted that the promissory notes/Hundies found in the locker were only to the tune of Rs. 18,35,000 and not Rs. 27,43,000. The assessee submitted that promissory notes belonged to different persons in Chhugani family and in support he filed list of promissory notes of each of the family members and confirmation of loans taken by various parties on Hundies. As per list, the assessee advanced Rs. 5,25,000 only on promissory note. There were eighteen promissory notes for Rs. 3,00,000 executed by M/s Shankar Cloth Stores, Neora, however, Shri Chandumal Khubani, proprietor of M/s Shankar Cloth Stores has denied in his statement about taking the loan of Rs. 3 lac. The promissory notes under the seal of M/s Shankar Cloth Stores, Neora were shown to Shri Chandumal Khubani; he has stated that the promissory notes were signed by his manager namely Shri Ramesh Kumar Khubani for his business. Said Shri Chandumal stated that the respondent assessee called him to Raipur for signing the promissory notes, but he could not go to Raipur due to his ill health and after his recovery from illness, when he contacted the respondent herein, the respondent informed him that promissory notes were misplaced and thereafter since there was no need of money, he never approached the assessee for the same.
The AO did not accept the explanation offered by the assessee regarding the above eighteen promissory notes and held that the assessee did not advance a sum of Rs. 3 lac to Shri Chandumal by recording that no prudent businessman shall leave promissory notes after signing the same with any moneylender and added an amount of Rs. 3 lac to the total income of the assessee.
Against the order of the AO, an appeal was preferred before the Tribunal by the respondent assessee and the Tribunal vide order impugned dt. 26th July, 1997 deleted the additions made by the AO by recording the findings that the manager, who signed the promissory notes, has categorically stated that no money was received and the proprietor of the concern also confirmed this fact. The total promissory notes found in the locker were about Rs. 18,35,000 and all of them did not belong to the assessee but they belonged to the family members as well and the AO accepted this fact. Further, none of the promissory notes are signed by any of the employees and under these circumstances there is no reason to disbelieve the assessee’s explanation that the amount was not given as it was not signed by the proprietor of the said concern.
On the basis of the facts of the case, as explained by the Tribunal and that findings of facts are not disputed that the promissory notes for Rs. 3 lac was executed by Shri Chandumal Khubnani, proprietor of M/s Shankar Cloth Stores, Neora and the said Shri Chandumal has denied in the statement about taking loan of Rs. 3 lac from the respondent assessee and when 18 promissory notes under the seal of M/s Shankar Cloth Stores were shown to the said Chandumal, it was stated that the same were signed by the manager Shri Ramesh Kuma Khubnani, who has also stated that the respondent assessee did not give loan for the reasons that promissory notes were not signed by Shri Khubnani, we are of the opinion that no question of law, much less any substantial question of law, is involved in this appeal for adjudication and the same is liable to be dismissed.
Accordingly, the instant appeal is dismissed. No order as to costs.
[Citation : 330 ITR 467]
