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Issues:
1. Whether unproved cash credits can be regarded as income from undisclosed sources? 2. Whether the direction of the Tribunal regarding cash credits was followed properly by the ITO? Detailed Analysis: Issue 1: The case involved a partnership firm deriving income as a civil contractor during the assessment year 1962-63. Initially, the assessment included cash credits of Rs. 9,00,000 as the assessee's income from undisclosed sources. Upon appeal, the Tribunal found five credits genuine and deleted those additions but set aside the matter regarding the remaining Rs. 4,65,000 for further examination by the ITO. The ITO, after considering the matter independently of the confessions, assessed the entire sum of Rs. 4,65,000 as the assessee's income from undisclosed sources. This decision was challenged by the assessee, leading to subsequent appeals. Issue 2: The Tribunal considered the contentions of both parties and found that the direction given in the earlier order was clear and categorical. The Tribunal directed the ITO to either produce the creditors for cross-examination or accept the cash credits as genuine. It was argued that the ITO should have followed the Tribunal's directions as the earlier order had become final under the IT Act. The Tribunal emphasized that the ITO had no authority to disregard the directions and that the orders of the authorities below lacked jurisdiction and were contrary to law. The Tribunal ultimately held that the explanation provided by the assessee regarding the cash credits was satisfactory and that there was no justification for treating the credits as income from undisclosed sources. In conclusion, the Tribunal rejected the application, emphasizing that the findings were based on factual assessments and that the earlier Tribunal decision, which had become final, must be upheld. The Tribunal's decision highlighted the importance of following clear directions and ensuring that the burden of proof under the IT Act was properly discharged by the assessee.
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