Law:

Section:

Section 69 of the Income-tax Act, 1961 - Unexplained investments - Pursuant to a search and seizure conducted at residential and business premises of assessee loose papers, documents, books of account and other valuable assets were found and seized - Statement of assessee was recorded - Assessing Officer noticed that during course of initial statement assessee had not disclosed ownership of locker with bank and said fact came into notice of revenue subsequently - Said account was opened and hundis and FDRs worth Rs. 18,35,000 were found - Assessee admitted that source of investment on hundis and FDRs was out of concealed income and offered for taxation - During course of hearing assessee submitted that promissory notes/hundis found in locker was only to tune of Rs. 18,35,000 and not Rs. 27,93,000 - Assessee submitted that promissory notes belonged to different persons in 'C' family and in support he filed list of promissory notes of each of 'C' family members and confirmation of loans taken by various parties on hundis - As per list, assessee advanced only Rs. 5,25,000 on promissory note - There were eighteen promissory notes for Rs. 3 lakhs executed by 'S', however, proprietor of 'S' denied in his statement about taking loan of Rs. 3 lakhs and stated that notes were signed by his manager - Assessing Officer did not accept said explanation and made addition - On appeal Tribunal deleted addition by recording findings that manager, who signed promissory notes, had categorically stated that no money was received and proprietor of concern also confirmed this fact - Further, total promissory notes found in locker were about Rs. 18,35,000 and all of them did not belong to assessee but they belonged to family members as well and Assessing Officer accepted this fact - Further, none of promissory notes were signed by any of employees and under these circumstances there was no reason to disbelieve assessee's explanation that amount was not given as it was not signed by proprietor of said concern - Whether Tribunal was justified in deleting addition - Held, yes Rajeev Shrivastava for the Appellant. Ashok Patil for the Respondent. JUDGMENT I.M. Quddusi J. - This income-tax…

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