Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1964-65 - There were credit entries in assessee's account books in names of three persons - One of them was examined by ITO in presence of assessee and cross-examined - He denied having given any loan to assessee or having received any interest - Summons issued to other two depositors were returned unserved - However, they were also examined later on by ITO but not in presence of assessee - Enquiries made by ITO showed that many assessees had approached there for havala hundis and brought into their accounts their own black money in shape of hundi loans from those bankers - Assessee requested ITO to issue fresh summons to these bankers - ITO rejected assessee's request and treated cash credits as assessee's income and disallowed interest thereon - Tribunal confirmed addition on account of loan and disallowance of interest thereon in regard to one depositor who was cross examined by assessee but deleted additions in respect of other two loans on ground that creditors were not cross examined by assessee - Whether onus of proving source of any money received by assessee was upon him - Held, yes - Whether since assessee made no attempts to produce witnesses whom he wanted to cross-examine, in such circumstances, ITO could not be said to have acted unreasonably or in violation of principles of natural justice - Held, yes - Whether, therefore, order passed by ITO was correct, and, it was to be restored - Held, yes FACTS The assessee had made credit entries in his books of accounts in the name of 'VB' and two others. According to the assessee, Rs. 1,35,000 had been borrowed by him from those three Multani bankers in respect of which he had executed hundies. A sum of Rs. 23,672 was the interest paid thereon. The assessee, therefore, claimed deduction in respect of the interest. According to the assessee, the entire amount had been repaid by him by a proper discharge of the hundies. The Income-tax Officer examined the banker, 'VB', in the presence of the assessee and the assessee was allowed to cross-examine him. He denied any knowledge of the loan and contended that all the hundies were havala…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492