Law:

Section:

Section 69A of the Income-tax Act, 1961 - Unexplained money - Assessment year 1960-61 - Assessee's books of account showed a hundi loan of certain amount - Assessee claimed to have borrowed said amount through her solicitor who in turn claimed to have arranged same through a hundi broker - Alleged hundi broker on examination told that he never arranged any loan to solicitor or assessee - Besides there was no documentary evidence with solicitor or assessee for repayment of loan, brokerage and interest - Whether in aforesaid circumstances, amount in question was rightly treated as undisclosed income of assessee - Held, yes FACTS The assessee had purchased a flat for Rs. 45,000. She had another flat which she sold off to one 'V'. While enquiring into the purchase and sale, the ITO found entries pertaining to a sum of Rs. 95,000 in the books of the assessee. A sum of Rs. 95,000 was alleged to have been borrowed by her on hundi loans. The ITO called upon her to explain these alleged loans. In answer to that requisition the assessee filed her account books. In said account books, there were entries of borrowings from as many as ten different persons said to be financiers or bankers of hundi loans. The assessee claimed to have borrowed the amounts through her solicitors who in turn claimed to have arranged the loan through a hundi broker. The hundi broker denied that he arranged hundi loans but he claimed to be a name lender. The solicitors had no documentary proof of borrowing and repayment of the loans, brokerage and interest nor the amount was recorded in his books of account. The ITO thus treated the amount of alleged loans as undisclosed income of the assessee. The Tribunal upheld the Assessing Officer's order. On reference : HELD Some errors in the statement of the facts in the order of the Tribunal were pointed out. These were merely minor errors which really did not affect the major findings given. Any mistake in the statement of facts did not necessarily vitiate the findings nor turn a question of fact into one of law. There was no reason for holding that in giving its finding the Tribunal had either misdirected itself or acted without any evidence or…

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