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Issues Involved:
The judgment involves the issue of addition of Rs.50,000 as unexplained cash credit in the name of a creditor, the burden of proof on the assessee to explain cash credits, and the differing treatment of cash credits in the case of two different individuals. Addition of Rs.50,000 as Unexplained Cash Credit: The appellant-assessee, a private limited company, had obtained an unsecured loan of Rs.50,000 from a creditor, Smt. Manju Gugalia. The assessing authority found the transaction to be non-genuine and added the amount to the total income of the assessee. Despite the appellant providing an affidavit from the creditor confirming the transaction, the assessing authority held that the creditor was not in a capacity to deposit such a significant amount. The Tribunal remitted the matter back to the assessing authority for further examination, directing the appellant to produce the creditor for cross-examination or provide convincing reasons for inability to do so. Burden of Proof on the Assessee: The Tribunal's decision was based on the principle outlined in Section 68 of the Income-tax Act, which states that if an assessee fails to explain a cash credit satisfactorily, it may be charged to income tax. The burden of proof lies on the assessee to establish the identity of the creditor, their capacity to advance the money, and the genuineness of the transaction. Mere filing of confirmatory letters or particulars is not sufficient to discharge this burden, as confirmed by previous court rulings. Differing Treatment of Cash Credits: In the case of the cash credit of Rs.16,000 standing in the name of Shri Raj Kumar, the Tribunal found that the transaction was adequately explained and recorded in the individual's books of account. The Tribunal distinguished this case from the unexplained cash credit of Rs.50,000 in the name of Manju Gugalia, justifying the decision to set aside the latter for further enquiry. The Tribunal's approach was deemed appropriate given the differing circumstances of the two transactions. In conclusion, the appeal was dismissed as the Tribunal's decision to remit the matter for fresh enquiry regarding the addition of Rs.50,000 was found to be justified based on the burden of proof on the assessee and the specific circumstances of the case.
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