INCOME-TAX APPEALS NOS. 1409/KB AND 1500/KB OF 1980-81, DECIDED ON 2ND DECEMBER, 1982. Versus INCOME-TAX APPEALS NOS. 1409/KB AND 1500/KB OF 1980-81, DECIDED ON 2ND DECEMBER, 1982.

ORDER

1. GULAM MURTAZA KHAN (MEMBER).‑ In these cross‑appeals relating to the assessment year 1977‑78, the assessee‑appellant has disputed the validity of the assessment order. He has also disputed certain additions confirmed in the appeal by the Commissioner of Income‑tax (Appeals). The Department, on the other band, has objected to the deletions made by the learned Com missioner of Income‑tax (Appeals) of additions of cash credit and unproved loan obtained from wife and others. The two appeals arise out of common questions of facts and hence the same are disposed of by a combined order.

2. The assessee‑appellant is an individual and derived income from ship‑breaking, interested and share income form a registered firm. The objec tions of the appellant concern the ship‑breaking business only. The return of income was filed by the appellant on 1st October, 1977, showing income from the following sources :‑ .

2. Rs.

3. (a)

4. Income from N. A. Industries, a sole proprietary concern

5. 40,000

6. (b)

7. Share of loss from Messrs Tonocraft

8. 3,842

9. (c)

10. Income from interest

11. 23,158

12. Total

13. 59,316

3. This statement was not supported by any statement of accounts but pursuant to notice issued by the Income‑tax Officer under sections 23 (2) and 22 (4) the appellant filed a receipt and expenditure account on 21‑&1978 indicating the following position

14. Rs.

15. Total receipts

16. 10,66,149

17. Expenditure

18. 10,26,018

19. Excess of income over expenditure

20. 40,138.98

21. This statement of receipt and expenditure was not supported by any balance sheet and hence the Income‑tax Officer, after making repeated requests obtained a copy of the balance sheet on 20‑1‑1979 as on 30‑6‑1977. After filing the copy of balance sheet the' appellant revised the return of income on 27‑1‑1979 declaring a total loss of 29,95,684. The Income‑tax Officer has given a break‑up of the value of the vessel named Marie Anne of 5,000 tons I. D. T. as under :‑‑

22. Rs.

23. Invoice value

24. 52,25,054

25. Import duty

26. 20,87,965

27. Import licence fee

28. 1,23,612

29. N. C. C. and pre‑import expense

30. 19,750

31. Insurance premium

32. 14,00,000

33. Total

34. 76,70,381

4. During the year under consideration the appellant scrapped only 600 tons of steel and showed the balance quantity in closing stock. The Income‑tax Officer has also reproduced in his order the balance sheet wherein the value of 4,500 tons of scrap was shown involve price in Us $ at the rate of 103 equivalent to Rs. 1,003 per I. D. T. at Rs. 46,35,000. As against this asset, the liabilities where shown at Rs. 76,50,000. The balance amount of Rs. 30,15,000 being the difference, was shown as a loss in the revised return. The appellant also explained to the Income‑tax Officer the reason for revising the return by submitting that the matter regard ing the import of ship was under litigation before the High Court which had issued an injunction restraining him from scrapping or selling the scrap etc. The High Court also granted bond facility to the persons had alien over the ship and the scrapping could only be done under their supervision. The Income‑tax Officer, after examining the balance sheet and on consideration of the explanation of the appellant, made the following observations :‑‑

35. "The perusal of the explanation of the assessee and the balance sheet will reveal that the loss declared is fictitious and imaginary. The assessee has disclosed the closing stock only at the invoice value and has not included element of duty in the cost perhaps due to the fact that duty has riot been paid as the ship is under bond but at the same time has disclosed a liability of Rs. 20,36,764 which, in fact, is the duty payable on the remaining portion of ship and will naturally form part and parcel of the cost of ship and ultimately the closing stock. Simi larly the assessee has not included the element of licence fee, N.O.C. and insurance white valuing the closing stock. It may be kept in view that the assessee has purchased a vessel of 5,000 I. T. D. out of which only 600 tons of scrap has been sold for a sum of Rs. 10,66,149. The rest of the vessel is in the closing stock which has been valued improperly resulting in imaginary notional loss of Rs. 33,15,000."

5. The facts mentioned above have been narrated in detail as the same are relevant for dealing with the appellant's objection that the order passed by the Income‑tax Officer was illegal because instead of proceeding on the basis of the revised return showing loss of Rs. 30,15,000 the Income‑tax Officer proceeded on the basis of original return showing a profit of Rs. 40,000 from ship‑breaking business. The learned counsel of the appellant makes a reference to page 19 of the Income‑tax Officer's order showing that while computing the income, the Income‑tax Officer processed on the basis of original return and in that view of the matter the revised return of income was still pending and that no assessment can now be made on the basis of this return because the same has become time‑barred. The learned counsel further explained the reason which prompted the appellant to revise the return of income by saying that while reaching the outside anchorage of Karachi Port, the ship struck with rocks and was capsized, as a result of which the cutting of the plates not only became difficult and costly but the surveyors also reported that it may not be possible to scrap a portion of the ship. Further, it was appre hended that about 60 % of the scrap was unrealisable. He submits that in view of these facts the appellant was entitled to evaluate the value of the ship at the cost or market value whichever was less. 1n fact, according to him the reduction in the value of the closing stock could have been to the extent of 61; % and in this view of the matter the appellant was justified in filing the revised return showing a substantial loss. 1n support of his conten tion regarding the valuation of closing stock, the learned counsel relied upon the following decisions reported as :‑

36. (1982) 45‑Tax (Trib.).

37. 12‑Tax Cases 813 at 827.

38. (1953) 24‑ITR‑481.

39. (1965) 50‑ITR.

6. The learned counsel did not discuss in detail as to how and in what manner the facts considered by the Courts in the aforesaid decisions could be made applicable in the appellant's case. After giving this reason for revising the return of income he vehemently contends that the order passed by the Income‑tax Officer on the basis of original return was not sustainable in law and should be annulled. In appeal the learned Commissioner of Income‑tax also considered this objection was of an academic nature because the Income‑tax Officer in fact did not base his assessment on the original return declaring profit of Rs. 40,000. He further observed that the Income‑tax officer fully considered the revised balance sheet which formed the basis for the revised return showing a loss of, Rs. 30,15,000 and hence the order passed by the Income‑tax Officer could not be considered as improper or illegal.

7. The appellant's grievance is that the learned Commissioner of Income‑tax (Appeals) was not justified in upholding the Income‑tax Officer s order for the reason that the revised return of income has not been disposed of and was still pending and that the assessment order based on original return was thus not sustainable in law. The learned Departmental Representative submits that the entire order of the learned Income‑tax Officer is based on the revised balance sheet from which the figure of loss was arrived at.

40. Further, he contends that he gave proper reasons for ignoring the figures of the revised balance sheet because it was not properly drawn up and resulted in an imaginary loss. He, therefore, submits that it was wrong to say that the revised return was still pending and the assessment order based on original return was illegal.

8. We have given careful consideration to the facts contained in the orders of the departmental officers as also the submissions made by both the parties. We may at the very outset mention that the balance sheet of the appellant is incorrect and not based on the ac; opted principles of accountancy. The net result of trading receipts and expenses incurred has not been reflected properly. The value of closing stock shown, is neither actual cost nor the market value but represents only the invoice value to the complete exclusion of items forming its cost and thus the loss shown is misleading. As a matter of fact, during the course of assessment proceedings the appellant knew that the Sellers' Bank had accepted an amount of $ 1,50,000 in full payment for the documents of U. S. 5,25,300 and hence there was little justification for adopting the value of closing stock at the original invoice resulting in an imaginary loss of Rs. 30,15,000. He should have, in any case, revised the balance sheet etc., on receipt of H. B. I's letter on 10‑6‑1980. The Income‑tax Officer nevertheless discussed in detail all the liabilities appearing in the balance sheet which were ascertainable. To be more precise, he considered the genuineness of the capital investment, loan obtained from wife `cash loans'/advances received from some persons and the amount received from the firm, Messrs T .Besides the amount mentioned hereinabove the Income‑tax Officer also discussed the liability of Rs. 37,52,054 payable to H...B...Ltd. which in fact, was added to the appellant's income as an unexplained credit. We, therefore, do not have. the slightest doubt in our mind that the Income‑tax Officer did proceed on the basis of revised balance sheet which showed the amount of loss suffered. It is noteworthy that in the original return of income the appellant declared the receipts from sale of scrap at Rs. 10,66,149 against which expenses of Rs. 10,26,018 were claimed resulting in a profit of Rs. 40,138. This working of profit in the original return appears to have been completely ignored by the appellant while showing the loss in the balance sheet and the revised return. It was the appellant's duty to have reconciled the figures shown in the two returns or proved that the receipts and expenses shown in his original return of income were incorrect and necessitated revision of return of income. In the absence of any such explanation the Income‑tax Officer bas no alternative except to hold that the revised figure of loss was fictitious and to proceed on] the basis of the receipt and expenses which the appellant never stated to be incorrect at any stage. In any case, a perusal of the original return clearly shown that the Income‑tax Officer did not start the computation from returned figure of profit of Rs. 59,316, but from Rs. 40,000 as reflected by the uncontroverted statement of receipts and expenses in conjunction with the contents of the balance sheet showing a fictitious loss. It is trite law that one should look at the substance and the real intent ratter than be carried away by the form only as has been emphasised by the learned Counsel. As a matter of fact, the Income‑tax Officer considered the revised return of income, and after rejecting the imaginary loss of Rs. 30,15,000 he proceeded on the figures as per the statement of the receipts and expenses. The decisions cited by the learned counsel in support of his contention also do not help his case because the facts obtaining in this case are totally different‑rather unique. In these circumstances, it cannot be held that the revised return was still pending. We have, therefore, no, hesitation in holding that the Income‑tax Officer proceeded properly inasmuch as he fully considered the revised return of income and passed an order strictly in accordance with the law. The appellant accordingly fails on this ground.

9. The next objection of the appellant relates to the‑‑confirmation addition of Rs. 4,12,882 by the learned Commissioner of Income‑tax (Appeals) representing the unexplained capital of the appe113nt. The relevant facts In regard to the capital investment of Rs. 5,50,000 are that the Income- tax Officer specifically asked through a notice under section 23(3) to explain the source of the aforesaid amount including the break‑up of cash in band and bank balance and source of acquisition of capital and other assets disclosed in the statement. The appellant gave an evasive reply, inter alia, by contending that the source of investment has been stated and substantiated by the bank certificates that the assessment has consider able means of being Managing Director of D...T...Mills Limited, as well as D...T...and had, inter alga, vast properties other than those men tioned above. The explanation having been found to be vague, the I. T. O. examined the wealth statement filed by the assessee as on 30‑6‑1974 (which has been reproduced in the assessment order) which showed the total net wealth of Rs. 11,49,744. He also noted that the balance sheet dated 30‑6‑1977 showed the capital/assets as a gross amount of Rs. 11,12,609. After adjusting the loan obtained from wife amounting to Rs. 4,50,000 the net balance worked at Rs. 6,62,609. In order to ascertain the availability of funds for investment, the Income‑tax Officer made a specific query whether the value o building and machinery etc., shown in the wealth statement as on 30‑6‑1974 was still in his possession or has been disposed of. In reply, the appellant simply stated that, "no factory or building stands in my name. I am surely using the godown but I do not know the where about of the owners". A heavy responsibility lay on the appellant's shoulders to explain the capital investment but the explanation given by him, as mentioned above, could hardly be considered as an explanation. The Income‑tax Officer, therefore:, inferred that the factory and machinery etc., valued at about Rs. 4 lacs and other assets bad not been disposed of: Even the cash in bank remained almost the same as was indicated by the interest income shown. In the absence of any explanation, therefore, the Income‑tax Officer only gave a credit of Rs. 1,37,578 being the amount withdrawn from sister concern, Messrs T as shown in' the revised statement and "the balance amount of Rs. 4,12,422 remaining unexplained added to the appellant's income. The learned Commissioner of Income‑tax (Appeals) has also dealt with the matter at considerable length. Before hint, it was contended that the Income‑tax Officer ignored the bank balance of Rs. 2,00,000 and cash Rs.15,000 declared in the wealth statement as on 30‑6‑1974. It was also submitted that in the wealth statement as on 30‑6‑1977, the factory building and machinery valued at Rs. 4 lass was also not shown. These amounts, thus explained the capital investment. In respect of the sale of the factory building and machinery, it was explained that these were erroneously shown by the Accountant of Messrs T... because the negotiations were still going on. It was also explained to the Commissioner of Income‑tax (Appeals) that the appellant has 1/5th share in the joint family F. D. R. and the appellant possessed more than Rs. 6 lacs in cash and bank before 1‑7‑1975, out of which the amount of Rs. 5,50,000 was invested in the ship‑breaking business. The Commissioner of Income‑tax (Appeals) considered this explanation given to him for the first time when, in fact, it should have been explained before the Income‑tax Officer. In .any case, the Commissioner of Income -tax (Appeals) considered this matter and noted that the appellant wealth statement as on 30‑6‑1977 showed a cash in hand and in the bank at Rs. 1,89,392. The availability of cash from sale of factory building and machinery also could not be proved and hence he did not find any merit in the explanation submitted and confirmed the order of the income‑tax Officer. Before us also no other reasons were given to explain the investment and only the facts narrated before the Commissioner of Income tax (Appeals) were repeated. We have also considered the matter in the background of the facts discussed by the Commissioner of Income‑tax (Appeals) and we have no hesitation in confirming his findings. The appellant thus fails on this ground as well.

10. The grounds relating to additional tax etc., under sections 18‑A(6) and 45‑A were not argued since the same were of a consequential nature.

11. The other ground of the appellant relates to the additions of advances of Rs. 1,00,000 each made by Mr. M...G... and Mr. M...H... which could not be explained and hence were added back and were also confirmed in appeal by the learned Commissioner of Income‑tax (Appeals). The admitted facts as per the Income‑tax Officer's order are that as per the first explanation these amounts represented 'dasti loans' obtained from Messrs M...G... and M...H... On a further query, it was explained that these amounts represented advances made to the appellant against sale of scrap and that this arrangement was made through the brokers. The Income‑tax Officer did not consider this explanation to be satisfactory because at one stage it was stated that these were 'dasti loans' and later on, it was submitted that these amounts represented advances against sales. The Income‑tax Officer also sent letters to these persons on the address given but the same were returned unserved. He therefore, did not accept the appellant's explanation as satisfactory and added these amounts to the appellant's income. Likewise, the Income‑tax Officer noted an amount of Rs. 5,25,000 as advances received against forward sale. The names and addresses of the persons who made these advances were also given to the Income‑tax Officer. In order to ascertain this fact, the Income‑tax Officer examined the books of the account with reference to bill books and weight notes etc. He noted that the entire sale consideration was paid by these parties at the time of purchases and no alleged adjustment of the so‑called advance was made in the bills. He, however, observed that in the appellant's trade people do make advance payment for the purchase of scrap iron and hence he gave an allowance to the appellant by making, an addition Rs. 2,50,000 only against the amount of Rs. 5,25,000 shown as having been received in advance. The Commissioner of Income‑tax (Appeals) has correctly observed that ill the case of loans advanced by Mr. M...G... and Mr. M...H... no adjustment whatsoever has made during the year under consideration. In fact, no sales appear to have been made to these persons. Reverting to the advances received from other persons the assessee failed to prove that any adjustments were made against the sales. He also rightly discarded the appellant's explanation that these adjustments were made later on in 1978‑79 because it was a no accounts case. We have perused the order of the departmental officers and have also heard the learned counsel of the assessee and we have no hesitation in upholding the additions made by the departmental officer as mentioned hereinabove.

12. In regard to the addition of Rs 1,36,000 the learned counsel submits that he does not want to press the same. Similarly, the objection relating to the confirmation of addition of Rs. 40,000 being the income from ship‑breaking declared by the assessee‑appellant in the original return has not been pressed or argued by the learned counsel in this context. He, however, vehemently pressed this issue in the other ground according to which the Income‑tax Officer could not proceed according to original return pf Income wherein this amount was shown after the assessee had filed a revised return showing a loss of Rs. 39,15,000. We have discussed at length this ground of the assessee‑appellant in the earlier paragraphs wherein the issue stands already disposed of.

13. We now take tip the department's appeal. The first ground relates to the deletion of the addition of unexplained cash credit amounting to Rs. 37,52,053. This amount appeared as a loan from H...B... limited in the balance sheet filed by the assessee respondent. The assessee failed to produce the Certificate from the bank in confirmation of the aforesaid amount of loan and hence a reference was made to H .B... limited, Foreign. Exchange Branch, K... requesting them to furnish copies of all accounts viz., T.R., IIM, O. D., savings and current accounts and the balance outstanding as on 30‑6-1917. The bank vide its letter C. D. 077701, dated 31‑5‑1980 gave a very short reply that an account in the name of Messrs N...A... industries was opened on 10th February, 1975 and credit balance of Rs. 669,93 appears in this account. They also informed that the party was not enjoying any credit facility from the bank. This reply was vague and did not meet the requirements of the Income‑tax Officer. Thereafter, further letters were addressed to the bank and their replies were passed on to the assessee for comments. There was an exchange of lengthy levers between the bank, the assessee and the Income‑tax Officer, vie are not burdening this order by reproducing these letters which have already beer reproduced in the order of the Income‑tax Officer and the learned Commissioner of Income‑tax (Appeals), except au important cane without which the conclusion drawn by the Income‑tax Officer and the learned Commissioner of Income- tax (Appeals) could not be properly appreciated. After going through the contents of the letters of the assessee and tile hank, the Income‑tax Officer arrived at certain conclusions and we quote from the order of the learned Commissioner of Income‑tax (Appeals) as under : ‑

41. "T he following inference is drawn by the I. T. O. after considering the above reply :‑‑‑

(i) That the bank has not advanced any O. D. or loan to the assessee and this fact is admitted by the bank as well as the assessee.

(ii) The assessee has paid only L. C. Margin to the bank amounting to Rs. 14,63,000. No further amount has been paid to Habib Bank Ltd. by the assessee.

(v) That the exporter of ship has been paid the entire consideration as deposed by their agent in Pakistan.

(iv) That the foreign exporters filed a suit against Messrs Habib Bank Ltd. in N... Y... for recovery of the L. C. amount only, as is evident from letter No. AA,/Int. . Bkg. dated 22‑5‑1979 from H...B... Ltd.

42. It is concluded by him that loan of Rs. 37,52,054 as contended to be taken to be from H...B... Ltd. is contradicted by the bank and remains unexplained. The sum is accordingly added to the income of the assessee:

43. At the time of hearing the same arguments are advance by the learned counsel as given earlier at the assessment stage dated 20‑6‑1980 and repro duced earlier. Beside; it is further contended that :‑

44. On the basis of refusal of H...B... Ltd.. to. remit the L. C. amount to City Bank M the said Bank reversed the entry and recovered the amount of U.S. $ 5,25,300 by debiting the amount to the account of the seller namely &f Inter Ocean Lands, Inc. Thereupon, M Inter Ocean Lines, Inc. fled a suit against .the City Bank M and Habib Bank Ltd., K.

45. The proceedings protracted till June, 1980 and ultimately due to the fact that the documents of tire vessel did iii fact suffer from the discrepancies as pointed out by Habib Bank Ltd. and also the fact that the vessel had capsized while beaching at Gaddani, which was the responsi bility of the sellers the suit was compromised between the said seller, City Bank M a party to the suit was completely unaware of the details of the proceedings.

46. The appellant came to know about the outcome of ‑ the suit on 10th June,1980, when H .B Ltd. informed the appellant as under ;‑

47. Messrs N. A. Industries Ltd.

48. Dear Sir,

49. Re :

50. L/C No. 75463 for import of unserviceable ship Marie Ann.

51. We refer to the above: letter of credit and are pleased to inform you that City Bank Manila have agreed to accept US. $ 1,50,000; Equivalent to Pak. Rs. 14,92,020 in full payment for the document of US. $ 5,25,300 under the above credit and accordingly the documents have been accepted by us.

52. After adjustment of your margin amount of Rs. 14,63,800 a balance of Rs. 28,220 still remains outstanding. Please, therefore, let us have your cheque for Rs. 28,220 after which you may collect the documents from us.

53. Thanking you.

54. Yours faithfully,

55. (Sd.)

56. (Iqbal Ahmad Mirza),

57. P. Assistant Vice‑President. International Banking."

58. The appellant made the payment of R.28,220 (to .H...B... Ltd. on 11‑6‑1980 and took possession of the documents. Thus, the ultimate position in regard to the prix of the vessel after payment of Rs. 28,220 worked out at U S $ 1,50,000 or Rs. 15,20,240 only instead of U S $ 15,25,300 or Rs. 52,25,300. At the point of time Balance sheet was prepared for the financial year ending on 30th June, 1971, the appellant was not aware of the fact that ultimately the issue would be resolved and the cost of i6e ship would aggregate to Rs. 15,20,240 only. Hence on the basis of the L. C. opened by the appellant with H .B.;. Ltd. K .the following entries had been made m the Balance sheet :‑

59. Credit

60. Habib Bank Ltd.

61. Rs. 52,25,300

62. (U S $ 5,25,300

63. Cost of vessel

64. Rs. 52,25,300

65. The appellant having paid Rs. 14,73,000 contingent liability payable to H.., B... Ltd. as on 30‑6‑1977 was shown at Rs. 37,52,054.

66. It is quite obvious from the letter, issued by the H...B... Ltd. dated 10 th June, 1980 that City B... M... had agreed to accept U S $ 1,50,000 i.e. Rs. 14,92,020 in Pak. Currency in full payment for the document of US $ 5,25,300.

67. At the appellant could not foresee the events that culminated on 10 th June, 1980 naturally the entire price of the vessel i.e. U S $ 5,25,300 was credited to H...B... Ltd and debited to the account of the vessel.

68. It was a contingent liability and there was no introduction of cash whatsoever in the books of the appellant."

14. The admitted facts appear to be that L.C was opened by the appellant for U S; 5,25,300 through H...B... Ltd: in favour of M. Inter Ocean Lines, Inc., seller of the ship through the First National City Bank M. The seller received the aforesaid amount from the First National City Bank M. When the ship reached the outer anchorage of the Karachi Port, it was struck by a rock and was capsized. This fact is borne out from the report of the surveyors and an Inspector of the Department. Since H...B... Ltd. noted certain discrepancies in the documents connected with the purchase of the vessel, it refused to honour its commitment. The sellers, therefore, filed a suit against the First National City Bank M and H...B... Ltd. K. The assessee also filed a suit in the High Court of Sind at K for declaration and injunction as the owners of the vessel were trying to back out of the transac tion on account of increase in the prices of steel. The litigation is said to have continued for about four years. The matter was settled so far as the assessee was concerned, on receipt of a letter dated 10‑6‑1980 from H... B... Ltd. addressed to the assessee. During the course of proceedings before the Income‑tax Officer the assessee vide its letter dated 16‑6‑1980 clearly informed the Income‑tax Officer by stating that he has received an offer according to which the bank made a compromise by accepting U S $ 1,50,000 from him in view of the full amount of the credit. For the sake of convenience we have underlined the portion of the bank's letters confirming the assessee's contention. It is abundantly clear that the amount of Rs. 37,52,054 was picked up by the Income‑tax Officer from the balance sheet filed by the assessee. As has been discussed in earlier paragraph, the balance sheet was drawn up in a particular manner and ‑for a particular purpose on a much earlier date, but it did not reflect the real state of financial affairs. In fact, except for mentioning certain admitted amounts of liabilities, it was fictitious for all practical purposes. The H...B... Ltd. categorically denied having paid any such amount on behalf of the assessee. The Income‑tax Officer has also failed to make out a case that the assessee made payment of this amount to any bank or the seller of the vessel. The Income‑tax Officer has also failed to rebut or give any positive finding on the H... Bank's letter dated 10‑6‑1980, wherein they confirmed that the City Bank M agreed to accept U S $ 1,50,000 in full payment, of the document of U S $ 5,25,300. In view of these facts it appears that the learned Commissioner of Income- tax (Appeals) arrived at a correct conclusion and hence we confirmed the same, and the Department's appeal fails on the issue.

15. The next ground of the department disputes the finding of the learned Commissioner of Income‑tax (Appeals) accepting the loan of Rs. 4,50,000 made by the assessee's wife. The assessee's explanation was not accepted by the Income‑tax Officer because he found that the wealth tax return of Mrs. R...R... wife of the assessee, as on. 30‑6‑1978 declared an amount of Rs. 5,12,720 as an advance made. The Income‑tax Officer that this entry showing the advance could not be considered relevant for the year ending 30‑6‑1977 the I. T. O. noted the in the wealth statement as on 30‑6‑1977 the lady tad not shown any loan or advance whatsoever, and hence he added back the amount of Rs. 4,50,000 to the assessee's income. In appeal, the learned Commissioner of Income‑tax (Appeals) considered ‑ in detail all the relevant facts connected with this matter as also the contents of the affidavit dated 1‑6‑1980 filed by Mst. F...B... confirming that. the loan of Rs. 4,50,000 was made to the husband on 30‑6‑1977 out of Rs. 5,12,720 which she had declared in her wealth‑tax return as on 30‑6‑1978.

69. It was explained to the learned Commissioner of Income‑tax (Appeals) that in the affidavit the lady had meant to declare that the loan of Rs. 4,50,000 was made as on 30‑6‑1977 but it was due to a typing mistake since cash‑in -hand and bank as on 30‑6‑1977 was wrongly typed as 30‑6‑1978. At the time of assessment proceedings also this typing error was pointed out but the same was not considered by the Income‑tax Officer. The Commissioner. of Income‑tax (Appeals) observed that the Income‑tax Officer was misled by the wealth‑tax order relating to the period ending 30‑6‑1977, which did not indicate any loan or advance by the lady. A reference to the wealth tax record was, however, clearly indicative that the wealth tax return of Mst. F...B... for 1977‑78 clearly showed a loan of Rs. 4,50,000 to Mr. A... her husband alongwith cash in hand Rs. 62,720 and Prize Bonds of Rs. 27,000 totalling Rs. 5,39,720. The Wealth Tax Officer instead of showing the break up of this amount of Rs. 5,39,720 has recorded cash, in hand and in bank at Rs. 5,39,720 and money advanced as at 'N 1 L'. The learned Departmental Representative supports the Income‑tax Officer's order for the reasons mentioned therein but no material was placed before us, nor any submissions were made to rebut the findings of the learned Commissioner of Income‑tax (Appeals) relating to the error committed in mentioning the break‑up of the amounts as shown by the lady and also mentioned by the Wealth Tax Officer in the order relevant for the year ending on 30‑6‑1977. In view of these facts we do not find anything wrong with the order of the learned Commissioner of Income‑tax (Appeals) and confirm the same. The Department's appeal fails on this issue as well.

16. In the result, the two appeals are disposed of as indicated above.