INCOME TAX ACT, 1961

Section 68 read with 69A

Income from undisclosed sources - Demand drafts (DDs) obtained and given to excise commissioner for bidding arrack auction - PAN and income tax assessment of parties issuing DDs not provided by assessee to explain source of income -

Assessee was an excise contractor. His assessment was completed under section 143(3) read with section 147, after making addition towards demand drafts obtained and given to excise commissioner for bidding arrack auction. CIT(A) deleted part addition. On further appeal, Tribunal granted partial relief to assessee remitted issue back to file of AO for examining case afresh in respect of balance addition. During second round of litigation, AO confirmed addition in respect of DD taken from certain parties on allegation that assessee failed to submit confirmations also failed to prove source of income in hands of persons who gave DD in favour of excise commissioner on behalf of assessee. CIT(A) confirmed part addition on ground that although, assessee filed confirmation letters but failed to mention PAN numbers in respect of certain parties, and failed to prove source. Held: Although assessee filed confirmation letter along with affidavit from person who gave DD, but fact remained that details of PAN and income tax assessment was not furnished, so as to ascertain whether party was having sufficient source of income to explain DD issued on behalf of assessee. However, in respect of party, for whom assessee gave details of income tax assessment of person who gave DD, merely for reason that PAN was not furnished, no addition could be made. Appeal filed by assessee was partly allowed.

REFERRED : Kalyankumar Ray v. CIT (1991) 191 ITR 634 (SC) : 1991 TaxPub(DT) 1526 (SC) K.I. Venkatesh v. Dy. CIT [ITA Nos.1080,1081 & 1082/BNG./2012, ITA Nos.1100,1101 & 1102/BNG./2012, dt. 6-2-2015]

FAVOUR : Partly in assessee's favour

A.Y. : 2001-02

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