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Issues Involved:
1. Addition of alleged bogus hundi loans as income u/s 68 of the Income-tax Act, 1961. 2. Jurisdiction of the High Court to review findings of fact made by the Tribunal. Summary: Issue 1: Addition of Alleged Bogus Hundi Loans as Income u/s 68 The assessee, a private limited company, faced an addition of Rs. 20,000 by the Income-tax Officer (ITO) for the assessment year 1963-64, which included alleged bogus hundi loans. On appeal, the Appellate Assistant Commissioner (AAC) remanded the matter for re-examination. The ITO, in a fresh order, reduced the addition to Rs. 15,000, comprising three loans of Rs. 5,000 each from Gokuldas Narsuman, Bhagwandas Nandlal, and Tulsidas Bhojraj. The AAC upheld the ITO's decision, and the Tribunal confirmed the addition of Rs. 10,000 for loans from Bhagwandas Nandlal and Tulsidas Bhojraj, citing insufficient evidence to prove the genuineness of these transactions. Issue 2: Jurisdiction of the High Court to Review Findings of Fact The High Court emphasized that it does not have jurisdiction to review the findings of fact made by the Tribunal unless the findings are challenged as being unsupported by evidence, based on irrelevant or inadmissible evidence, or are unreasonable or perverse. The High Court's jurisdiction is advisory and limited to the questions referred to it. The court cited precedents, including Aluminium Corporation of India Ltd. v. CIT and Karnani Properties Ltd. v. CIT, to support this position. Tribunal's Findings and High Court's Observations The Tribunal found that the loan from Bhagwandas Nandlal was not established as genuine due to lack of corroborative evidence, despite the repayment being made by cheque. Similarly, the loan from Tulsidas Bhojraj was also deemed unexplained as the evidence was not processed by the lower authorities. The High Court noted that the Tribunal failed to consider all relevant facts and evidence, particularly the bank certificates confirming the transactions. The Tribunal's findings were deemed vitiated due to improper consideration of evidence. Conclusion The High Court declined to answer the referred question due to the lack of valid findings from the Tribunal. The reference was disposed of with no order as to costs. The High Court recommended that the Tribunal re-hear the appeal and adjust its order within three months, considering the assessment years involved. Keywords: - Bogus hundi loans - Income-tax Officer (ITO) - Appellate Assistant Commissioner (AAC) - Tribunal - Section 68 of the Income-tax Act, 1961 - Jurisdiction of the High Court - Findings of fact - Bank certificates - Genuineness of transactions
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