Dipak Kumar Sen, J.
1. This reference arises out of the income-tax assessment of Premier Suppliers (P.) Ltd., the assessee in the assessment year 1965-66, for which the corresponding previous year ended on the 3rd November, 1964.
2. The ITO found that a sum of Rs. 25,000 was credited in the books of the assessee in the account of one Sureka Jute Company and issued summons to the latter to adduce evidence and produce its books and the other documents to prove the source of this credit. By a letter dated the 17th December, 1968, Sureka Jute Company informed the ITO that its books of accounts had been seized and retained by the income-tax department. Thereupon, the ITO called upon the assessee to prove that the loan was a genuine one. The assessee produced one Bidyanand Sureka, the sole proprietor of the Sureka Jute Company, who deposed before the ITO, inter alia, that he was a partner of the firm, Daluram Gaganmall, since 1964 and had advanced money to the assessee in the past. The books of accounts of the firm were in possession of the ITO, Sp. Circle IV. He did not remember the dates of the transactions nor the amounts advanced nor could he produce the bank accounts which it was stated were also with the ITO, Sp. Circle IV. He admitted that some transactions of the firm, Daluram Gaganmall, were bogus. From a list prepared by the ITO of transactions relating to the period S. Y. 2014-15 to S. Y. 2017-18 he indicated the transactions which were bogus. He, however, stated that the transactions with the assessee so far as he remembered were genuine and that the name of the assessee did not appear in that list. The ITO held that the assessee had not proved the source of the cash credit and it was not possible to ascertain the same. Accordingly, he added the amount of credit to the income of the assessee and brought it to tax.
4.Being aggrieved, the assessee preferred an appeal before the AAC, It was contended that the proprietor of Sureka Jute Company had confirmed the loan by his oral evidence, that the interest in respect thereof had been paid by cheques and, therefore, the loan had been sufficiently proved. The AAC did not accept the contentions of the assessee and confirmed the assessment.
5. There was a further appeal by the assessee to the Tribunal. It was reiterated before the Tribunal that the proprietor of Sureka Jute Company had stated on oath that the loan was genuine and that interest on this loan had been paid by cheques. Another loan of Rs. 80,000 obtained by the assesses from Daluram Gaganmall in 1963-64 had been accepted as a genuine loan by the AAC in the assessment year 1964-65. It was contended further that the AAC had wrongly relied on the finding of the IAC that Bidyanand Sureka had admitted before the ITO that M/s. Sureka Jute Company was engaged only in name-lending activity.
6. It was contended by the revenue on the other hand that the confession of Bidyanand Sureka had been brought to the notice of the assessee when the deposition of Bidyanand Sureka was recorded on the 8th of May, 1969.
7. The Tribunal noted the finding of the IAC in the penalty proceedings that the account books of Sureka Jute Company in the possession of the income-tax department related to the period prior to 5th September, 1963. It was accordingly held that the explanation of Bidyanand regarding non-production of account books was not correct. From the deposition of Bidyanand Sureka the Tribunal concluded that Bidyaoand was not sure whether the transaction in dispute was genuine or not and held that he failed to produce the relevant account books. The Tribunal also noted that the loan was advanced in cash while the interest was paid by cheques. The Tribunal, accordingly, rejected the contentions of the assessee and dismissed the appeal.
8. On an application of the assessee under Section 256(2) of the I.T. Act, 1961, this court held that questions of law arose from the order of the Tribunal. Accordingly, the Tribunal was directed to draw up a statement of case and refer the following questions to this court :
'1, Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the loan of Rs. 25,000 advanced by Messrs. Sureka Jute Co. was not genuine was perverse and based on irrelevant materials and inadmissible evidence ignoring relevant materials and admissible evidence ?
2. Whether, on the facts and in the circumstances of the case, the disallowance of interest of Rs. 1,292 paid by the assessee-company on the loan of Rs. 25,000 advanced by Messrs. Sureka Jute Co. was justified in law ?'
9. At the hearing, Mr. R, N. Bajoria, learned advocate for the assessee, contended that the assessee had established, (a) the identity of the creditor, (b) the capacity of the creditor to advance the loan, and (c) the admission of the creditor that he had in fact granted the loan. According to Mr. Bajoria this was enough to establish the genuineness of the loan. He also submitted that the Tribunal had wrongly taken, into account the alleged finding of the IAC that the account books of Sureka Jute Company for the relevant year were not in the custody of the income-tax department and had concluded therefrom that Sureka Jute Company failed to produce its account books. The purported order of the IAC passed in a different proceeding was irrelevant and inadmissible and the Tribunal was not justified in taking note of the same and basing its decision thereon.
10. On a consideration of the entire facts and circumstances of the case it appears to us that the Tribunal has duly considered the entire evidence adduced by the assessee and it cannot be said that the Tribunal bad ignored any relevant material. The order of the IAC, in our view, was relevant to the controversy and had been passed in penalty proceedings arising out of the very same assessment. The admissibility of a piece of evidence in proceedings before the Tribunal cannot be tested strictly by the Evidence Act. It is not the complaint of the assessee that the Tribunal collected evidence behind the assessee's back and that the assessee had inadequate opportunity to deal with the same.
11. On the evidence as on record it is possible to take two views, and the Tribunal has taken one view which is against the assessee. Sitting in this advisory jurisdiction we cannot, appreciate the evidence afresh and draw conclusions different from those drawn by the Tribunal.
12. We, however, note that Bidyanand Sureka in his deposition has referred only to the transactions of the firm, Daluram Gaganmall, and not to those of Sureka Jute Company.
13. For the reasons given above, we answer the question No. 1 in the negative and in favour of the revenue. By reason of the answer to question No. 1, the question No. 2 has to be answered in the affirmative and also in favour of the revenue.
14. In the facts and circumstances of this case, there will be no order as to costs.
C.K. Banerji, J.
15. I agree.