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2008] 300 ITR 19 [2007] 164 TAXMAN 595 (PUNJ. & HAR.) HIGH COURT OF PUNJAB AND HARYANA Shiv Rice & General Mills v. Commissioner of Income-tax, Bathinda ADARSH KUMAR GOEL AND RAJESH BINDAL, JJ. IT APPEAL NO. 400 OF 2006 OCTOBER 24, 2006 Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1998-99 - During course of assessment proceedings, Assessing Officer found that certain cash credits introduced by assessee in his books of account in name of certain persons were not genuine and, accordingly, made addition on that count - Tribunal found that some of creditors of assessee were mere labourers, milk vendors or some low paid employees who had their own families to support out of income earned by them instead of advancing loans to assessee even without carrying any interest and upheld addition made by Assessing Officer - No explanation was furnished by assessee as to why aforesaid persons advanced amount to assessee free of interest - Whether Tribunal was justified - Held, yes FACTS During the course of assessment proceedings, the Assessing Officer found that the assessee had introduced cash credits in his books of account in the name of 17 persons. The Assessing Officer doubted the genuineness of the said cash credits and, accordingly, asked the assessee to explain the same. The Assessing Officer considering the explanations furnished by the assessee, held that the said cash credits were not genuine and, accordingly, made additions to the income of the assessee on that count. On appeal, the Commissioner (Appeals) found a part of said cash credits to be genuine and, accordingly, deleted the additions to that extent. On further appeal, the Tribunal found that some of creditors of the assessee were mere labourers, milk vendors or some low paid employees who had their own families to support out of income earned by them instead of advancing loans to the assessee even without carrying any interest. Accordingly, it held that the assessee had not been able to satisfy about the creditworthiness of the creditors and, consequently, the genuineness of the transactions and, therefore, the Tribunal upheld the impugned additions. On appeal, the…

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