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Section 68 of the Income-tax Act, 1961 - Cash credit - Assessment year 1998-99 - Where assessee had claimed to have raised unsecured loan of Rs. 45,000 but creditor himself had admitted that he had advanced only Rs. 30,000 and had not received any interest on such loan and he was not a man of means, Tribunal was justified in sustaining addition on ground that assessee had failed to prove capacity of creditor and genuineness of loan [In favour of revenue] The assessee-firm had raised unsecured loan of Rs. 45,000 from one 'H', Saharanpur (U.P.). During the course of assessment proceedings, the Assessing Officer got the statement of said 'H' recorded through his Inspector who reported that 'H' had admitted of having advanced a sum of Rs. 30,000 but he did not admit any interest receipt. He also observed that the creditor was apparently not having any source of income and his sons were selling vegetables. The Assessing Officer, therefore, treated the loan as bogus and also disallowed the interest thereon. The creditor himself had admitted that he had advanced only Rs. 30,000 and had not received any interest on such loan and his sons were selling vegetables. The Commissioner (Appeals) sustained the addition. The Tribunal held that in this way, the Assessing Officer was right in concluding that 'H' was not a man of means and the necessary three ingredients of cash credit,i.e., identity, capacity and genuineness of the transactions had not been proved by the assessee. Although the amount has been received through bank draft, yet payment by cheque or draft did not prove the genuineness of the transaction. It, therefore, sustained the addition. The Tribunal also upheld disallowance of loss on account of bardana. Held that the assessee had made strenuous efforts to persuade this Court to reappreciate the evidence without pinpointing any perversity in the findings recorded by the Tribunal which was not permissible. The cash credit shown in favour of 'H' and the loss of Bardana had been held to be inadmissible on appreciation of evidence on record. The said finding being a finding of fact called for no interference by the Court. CASES REFERRED TO CIT v. Precision Finance…

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