Law:

Section:

Section 69A, read with section 256, of the Income-tax Act, 1961 - Unexplained moneys - Assessment year 1963-64 - ITO made an addition of Rs. 30,000 on ground that excise books seized by sales-tax authority showed that assessee had advanced Rs. 30,000 as loan to three parties and that assessee had failed to explain source of same - Tribunal deleted addition by giving a finding that said loans were sufficiently explained as being covered by withdrawals by three accounts barely two months earlier and deposits standing in such accounts had been taxed as income from undisclosed sources - Whether inference drawn by Tribunal from facts proved on record was neither unreasonable, nor perverse nor could it be said to be based on mere conjectures or services nor could it be said to be based on no evidence - Held, yes - Whether, therefore, order of Tribunal did not give rise to any question of law - Held, yes FACTS During the course of a raid, the sales-tax authorities had seized in 1965, exercise book, which showed that the assessee had advanced loans of two sums, Rs. 10,000 on 26-3-1963, and Rs. 20,000 on 30-3-1963. On explanation being called the assessee denied having advanced these sums, he denied that the entries in the exercise book related to his transactions. The ITO held that the exercise book belonged to the assessee, and that he had failed to explain the sources from which the loans recorded in it had been made. It was on this ground that he added Rs. 30,000 also as income from undisclosed sources. The AAC in appeal held that the exercise book belonged to the assessee, but deleted the addition of Rs. 30,000 on the ground that it was more than covered by the withdrawals in certain other accounts. Without deciding the question about the ownership of the exercise book, the Tribunal confirmed the deletion of the addition of Rs. 30,000. The Tribunal also rejected an application of the revenue under section 256(1) and declined to make a reference. On application under section 256(2) : HELD The Tribunal reached its conclusion by looking to the dates on which the loans of Rs. 30,000 were said to have been made, (i.e. in March, 1963), and which made it clear that they…

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