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Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal regarding addition of income u/s 68 of the Act.
Summary: The High Court heard an appeal u/s 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal. The Tribunal had rejected the appeal of the Revenue and upheld the order of the Commissioner of Income-tax dated August 31, 2004, which set aside the order of assessment made by the Assessing Officer by adding income of Rs. 48,000. The issue revolved around unsecured loans from various persons, specifically Rs. 64,640 from one individual and Rs. 80,000 from his family members. The Tribunal accepted the identity of the persons providing the loans and the transactions were made through bank drafts or cheques, indicating their credit-worthiness. The Tribunal also considered gifts given by relatives of the assessee, who were income-tax assessees, and found no questions regarding their credit-worthiness were raised. The High Court concluded that no substantive question of law warranting admission of the appeal existed, as the Tribunal's findings were based on factual determinations regarding the identity and credit-worthiness of the individuals involved. Therefore, the appeal of the Revenue was dismissed. The Tribunal's decision was based on accepting the identity of the individuals providing loans and gifts to the assessee, along with the mode of transactions being through bank drafts or cheques, indicating their credit-worthiness. The Tribunal specifically noted that no questions regarding the credit-worthiness of these individuals were raised before the appellate authority or elsewhere. The High Court concurred with the Tribunal's findings, stating that questions of fact, such as credit-worthiness and identity of the persons involved, were not within the purview of the court to determine. As a result, the High Court found no substantive question of law for admission of the appeal and dismissed the Revenue's appeal. The High Court emphasized that the Tribunal's acceptance of the identity of the persons providing loans and gifts, coupled with the mode of transactions being through bank drafts or cheques, implied their credit-worthiness. The Tribunal also considered the confirmations of credit-worthiness filed by relatives of the assessee who had given gifts, further supporting the credibility of the transactions. The High Court reiterated that questions of fact, such as credit-worthiness and identity, were not within the court's jurisdiction to determine, and as such, no substantive question of law arose for admission of the appeal. Consequently, the High Court upheld the Tribunal's decision and dismissed the Revenue's appeal.
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