Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1981-82 - In absence of satisfactory explanation in respect of certain cash credits, Assessing Officer added entire amount as income from undisclosed source under section 68 - Tribunal upheld addition, finding that addresses of three creditors were not known to assessee and no confirmatory letter had been filed - Whether findings recorded by Tribunal were based on appreciation of material on record and were findings of fact, and did not suffer from any legal infirmity - Held, yes - Whether those findings were binding on High Court in reference and, hence, Tribunal was justified in holding that deposits in question remained unexplained - Held, yes FACTS The assessee-firm derived income from Arhat of vegetables. During the course of assessment proceeding for the assessment year 1981-82, the ITO issued notice regarding cash credit entries. He called upon the assessee to explain these entries. In respect of three entries the assessee stated that they were trade deposits. However, it was not in a position to give addresses and their confirmatory letters had also not been filed. In respect of the other two deposits the source of deposits could not be explained and in this view of the matter the ITO added the entire amount as income from the undisclosed source by invoking the provision of section 68. On appeal, Commissioner (Appeals) deleted the addition on the ground that the identity and creditworthiness of the depositors had been accepted. On further appeal, the Tribunal reversed the order of the Commissioner (Appeals) by holding that in respect of three deposits, the addresses of the creditors were not known to the assessee and no confirmatory letter had been filed. The plea of the trade deposit had been disbelieved for want of evidence. In respect of the other two deposits, the Tribunal found that one creditor was living in Haridwar since 1984 and the other creditor had no source at all. It accordingly upheld the addition. On reference : HELD The findings recorded by the Tribunal were based on appreciation of material on record and were findings of fact and did not suffer from any legal…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492