9911796707
TMI Blog1978 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... have taken loan of this amount from one Pradeep Kumar Sutaria. Confirmatory letter from Sri Sutaria was filed. The ITO doubted about the genuineness of the alleged loan transaction and on a spot enquiry on 5th was noted in Gujarat script. The ITO examined Sri Sutaria who deposed that the loan transaction was made in the presence of Sri V. Appa Rao, an employee of the firm M/s. Khanna Eng. Works in which the assessee was a partner but Sri Rao had expressed his ignorance about the matter. The ITO, therefore, came to hold that the disputed amount was concealed income of the assessee and accordingly he included the same in the assessee's total income. 3. On appeal before the AAC it was contended on behalf of the assessee that the ITO arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory. He, therefore, concurred with the ITO on this point. 4. In the further appeal before us the learned counsel for the assessee vehemently urged that the assessee had discharged his onus to prove the third party's loan by establishing the identity of the creditor who was not a man of straw but an Income-tax assessee. He relied on the decision in the cases of Orient Trading Co. Ltd. (49 ITR 723) and Sarogi Credit Corporation (103 ITR 344) and urged that when the identity of the creditor and his capability is established it is not further necessary for the assessee to explain as to how and in what circumstances the third party obtained the money. He pointed out that the ITO on spot enquiry found as a fact that the creditor had recorded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be legitimately presumed that by establishing the identity of the creditor Sri Sutaria, the assessee had discharged the onus which lay upon him to prove the third party's loan and as such the lower authorities were not justified in including the sum of Rs.15,000 in the total income of the assessee. This view of ours is supported by the aforementioned decisions as relied on by the learned counsel for the assessee. We, therefore, direct exclusion of Rs.15,000 form the assessee's income. 6. The next grievance in this Income-tax appeal is against including of certain interest income under s. 64(i) (iii) of the Act. The ITO found that the assessee gifted Rs.30,000 to the wife and a son of his brother Premnath Khanna, and that the said Premn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case would fall within the section even though one was not the consideration for the other in the technical sense. We see that the language of s. 64(I) (iii) of 1961 Act as the same on those under s. 16(1) (iii) of 1922 Act and fact of the present case is similar to that of the case of C.M. Kothari. We, therefore, hold that the provisions of s. 64 (i) (iii) of the IT Act, 1961 were correctly applied in this case. However, s. 64 provides that in computing the total income of the assessee there shall be included all such income as arises directly or indirectly to the spouse or minor children of such assessee. Accordingly we direct the ITO to include the amount of income arising on account of accrued interest to the wife of the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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