Law:

Section:

Section 143, read with section 256 of the Income-tax Act, 1961 - Assessment - Additions to income - In respect of certain loan transactions which were treated by ITO as income from undisclosed sources, Tribunal found that hundi loans taken by assessee through crossed cheques were obtained through broker who was paid brokerage by cheques and all cheques passed through recognised banks that interest on loans was also paid through bankers by cheques; that assessee had given names, addresses and G.I.R. Numbers of all bankers who advanced moneys and amounts borrowed from them; that summons to hundi bankers and brokers were duly served and, in response, they had submitted confirmatory letters in regard to advances made to assessee - Tribunal, accordingly ,held that loans were genuine transactions and could not be added back to assessee's income - Whether Tribunal's findings were pure findings of fact based upon appreciation of evidence and hence, no question of law arose out of that finding - Held, yes FACTS In respect of certain loan transactions found in assessee's accounts, in was explained that these were genuine transactions of borrowings on hundis from various parties about whom complete details were furnished. The ITO summoned all the bankers. However, they did not personally appear before him but instead each one of them sent a letter confirming the loan advanced by them to the assessee. The ITO was not satisfied and held that he was only obliging the assessee by issuing summons to the third party concerned, while in case of the partly not turning up, it was for the assessee to produce the party so that he could examine and satisfy himself that the partly was in a position to give the loans taken from him. On appeal, the AAC while appreciating the assessee's submission that for enforcing the attendance of the hundi workers the assessee had no powers; on the contrary, the ITO had the necessary powers, held that the ITO had not made proper enquiries. He accordingly set aside the assessment and ordered assessments to be made de novo. On second appeal, the Tribunal found the following circumstances having been established: (1) that all the hundi loans were…

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