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TMI Blog1978 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... 000; and (e) Seth Giridharidas Lilaram-Rs. 40,000. The ITO also found khata-peta loans of Rs. 20,000 and Rs. 52,000 purported to have been received from M/s. Daluram Gaganmull and Padam Textiles. In confirmation of the cash credits, which according to the assessee were originally borrowed on hundis as also the khata-peta loan, confirmation letters of the lenders were produced. The ITO issued summons under s. 131 of the I.T. Act, 1961, to the lenders at the addresses given by the assessee, but they were returned unserved with the remark " not known". The assessee could not furnish the latest whereabouts of the creditors except that one Bidyanand Surekha was produced on behalf of Daluram Gaganmull. Even this person could not produce the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cash, certificates were produced from the bank in confirmation. Each of the creditors had confirmed the loans by letters mentioning their Income-tax file numbers. Seven hundies of Ghanshyamdas Uttamchand had been discounted through the Dena Bank." On such findings, the AAC deleted all the additions made in respect of the said cash credits and the said khata-peta loans. From the above order of the AAC, the revenue preferred a further appeal to the Tribunal. It was contended that the order of the AAC was erroneous as the signatures of the creditors had not been proved and that in any event the alleged creditors had made confessions before the revenue authorities. The Tribunal noted the following facts: (a) In the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this claim for deduction. On appeal, the AAC totally accepted the claim of the assessee. The Tribunal confirmed the disallowance of the interest paid to Daluram Gaganmull but allowed the deduction in respect of the interest paid to the other parties. At the instance of the CIT, West Bengal-III, the Tribunal under s. 256(1) of the I.T. Act, 1961, has drawn up a statement of case and has referred the following questions: Assessment year 1963-64 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal's order upholding the deletion of Rs. 1,51,000 being the alleged hundi loans and Rs. 15,347 interest is perverse or unreasonable ? 2. Whether, on the facts and in the circumstances of the case, there was evidence b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. On a further opportunity being given to the assessee, it stated that the letters of creditors confirming the loans had been filed before the ITO and, therefore, the assessee had discharged the onus which lay upon them. The ITO did not accept the assessee's submission and added back the amount as assessee's income from undisclosed sources. The AAC upheld the order of the ITO. The Tribunal also upheld the order of the ITO. One of the questions referred to this court was whether on the facts and in the circumstances the said sum of Rs. 3,10,000 could be treated as income under s. 68 of the I.T. Act, 1961. It was urged that these sums could not be treated as undisclosed income of the assessee as the ITO did not call for any stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. On question No. 2 in respect of the assessment year 1963-64, we have already noted that this transaction was by cheque and passed through a bank. There was a confirmation letter from the creditor. So it cannot be said that there was no evidence before the Tribunal to hold that the said khata-peta loan is genuine. Accordingly, we answer this question in the affirmative and also in favour of the assessee. The questions referred in respect of the assessment year 1964-65 are consequential and in view of the answers given to the questions in the earlier year, we answer both the said questions in the affirmative and in favour of the assessee. In the facts and circumstances, there will be no order as to costs. BANERJI J.-I agree. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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