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TMI Blog1976 (1) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000 made by the Income-tax Officer as income from unexplained cash credits in the name of the assessee in his assessment for 1964-65 ? (2) Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that the department had examined previously the two persons whom the assessee wanted to examine, is supported by any material ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the assessee has discharged the onus of proof in respect of the alleged loans of Rs. 25,000 each on April 30, 1962, and Rs. 20,000 each on June 15, 1962, from Seth Motiram Newandram and Seth Khubchand Harisingh by requesting that they should be summoned for bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the assessee, the entire amount of Rs. 1,35,000 had been repaid by him by a proper discharge of the hundies. He had submitted to the Income-tax Officer the discharged hundies and confirmation statements and receipts from the bankers to show that the amounts had been fully repaid. The Income-tax Officer examined the banker, Seth Vashdev Biharilal, in the presence of the assessee and the assessee was allowed to cross-examine him. Biharilal denied any knowledge of the loan and contended that all the hundies were havala hundies, they being mere adjustments and the banker having only lent his name. The assessee maintained that he executed the hundies on April 30, 1962, and June 15, 1962, for the purpose of depositing money in the sub-treas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover was several lakhs in each year. Many assessees had approached them for havala hundies and brought into their accounts their own black money in the shape of hundi loans from these bankers." For these reasons the Income-tax Officer, by his order dated March 18, 1969, treated the total sum of Rs. 1,35,000 as the assessee's concealed income, and added the same to his total income, under section 65 of the Income-tax Act. He also disallowed the claim for deducting the interest of Rs. 25,672. The order of the Income-tax Officer was confirmed by the Appellate Assistant Commissioner by his order dated November 11, 1969. On further appeal, the Tribunal confirmed the finding of the Income-tax Officer in regard to the loans borrowed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts had been borrowed at Madras only on April 30, 1962, and June 15, 1962, it is not understandable how the appellant could have made the deposits in question in the sub-treasury at Chalakudy on the very same day. This circumstance clinchingly shows that the appellant's version that he borrowed from Vashdev Biharilal at Madras Rs. 25,000 on April 30, 1962, and Rs. 20,000 on June 15, 1962, is not true and that the version of Vashdev Biharilal that he had not lent any money to the appellant is true." The Tribunal accordingly, as stated earlier, confirmed the order in regard to the amounts claimed to have been borrowed from Biharilal. As regards the other two loans, the Tribunal could have in the circumstances held that its finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above-mentioned three bankers. In view of our finding that Rs. 45,000 alone could be added under the bead 'other sources', it follows that Rs. 15,780 out of Rs. 23,672 claimed as deduction by way of interest payment, should be allowed." The Tribunal has thus allowed the appellant's claim to deduct the proportinate interest in respect of the last two loans and set aside the order treating the last two loans amounting to Rs. 90,000 as undisclosed income. Hence the present reference. Section 68 of the Income-tax Act, 1961, reads as follows : "Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee made no attempt to produce the witnesses whom he wanted to cross-examine, apart from merely asking the department to issue fresh summons. The officer refused to issue fresh summons because according to him there was no purpose in issuing summons over and over again after the first summons had been returned unserved. In the circumstances it cannot be said that the assessee was denied a reasonable opportunity of adducing evidence. The officer cannot be said to have acted unreasonably or in violation of the principles of natural justice. He was, in the circumstances of this case, entitled to draw an inference that the receipts were of an assessable nature. The Tribunal having disbelieved the assessee's version in regard to his borrowi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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