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Issues:
1. Cash credit discrepancy in assessment proceedings for the assessment year 1974-75. 2. Discrepancy regarding the source of a cash credit of Rs. 20,000 in the name of a third party. 3. Dispute over the addition of Rs. 20,000 as income from other sources. Analysis: 1. The assessee, a HUF involved in pawn broking and property income, faced a cash credit issue during assessment for the year 1974-75. The Income Tax Officer (ITO) noted a cash credit of Rs. 20,000 on 1st May, 1973, in the name of a third party, K. Periaswamy Konar. The ITO, after investigation, found discrepancies in the explanation provided by the assessee regarding the source of the credit. The ITO concluded that the cash credit was not genuine based on evidence that the compensation payment, claimed to be the source, was received after the credit transaction date. 2. Upon appeal, the Appellate Authority Commissioner (AAC) partially upheld the addition, allowing a relief of Rs. 9,600 considering the availability of a portion of the amount with the assessee from land sale proceeds. The assessee contested that the entire addition should have been deleted based on the sworn statement and certificate provided by the creditor, arguing that the onus of proof was discharged. The Revenue supported the lower authorities' decision, asserting the sufficiency of evidence for the addition. 3. The Tribunal considered the discrepancy in the compensation receipt but focused on the credit to the third party, who happened to be related to the assessee. Referring to a Supreme Court case precedent, the Tribunal emphasized that even if the explanation provided by the creditor was partially false, it did not establish a direct link to include the amount in the assessee's income. Relying on legal principles, the Tribunal concluded that the assessee had reasonably explained the cash credit, thereby deleting the entire sum of Rs. 20,000 added as income from other sources by the ITO. Consequently, the appeal by the assessee was allowed.
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