Law:

Section:

Section 69, read with sections 69A, 69B and 69C, of the Income-tax Act, 1961 - Unexplained investments - Whether invocation of sections 69, 69A, 69B and 69C would depend on nature of explanation submitted by assessee and satisfaction of Assessing Officer about acceptability of same, which is sine qua non for invoking these provisions - Held, yes - A survey was conducted at business premises of assessee during which certain loose papers were found - Said papers contained entries regarding sales which were not recorded in regular books of account - During survey, discrepancies in cash, sugar stock and stock register were also detected - Not being satisfied with explanation given by assessee in regard to aforesaid discrepancies, Assessing Officer rejected assessee's books of account and made assessment by estimating sales and making additions on account of unexplained cash credit and unexplained stock - Commissioner (Appeals) and Tribunal upheld assessment order - Whether in view of concurrent findings recorded by all authorities against assessee on aforesaid issue, no question of law arose from Tribunal's order - Held, yes Section 36(1)(iii) of the Income-tax Act, 1961 - Interest on borrowed capital - During assessment proceedings, Assessing Officer noted that while assessee had claimed deduction of interest paid, it had not charged any interest on advances given to its sister concern - He, accordingly, worked out interest on advances given to sister concern and holding that interest to that extent was for non-business purpose, disallowed same - His action was confirmed by Commissioner (Appeals) and Tribunal - Whether since satisfaction recorded by Assessing Officer and upheld by Commissioner (Appeals) and Tribunal was largely based on their findings of fact, no question of law did arise on that issue - Held, yes FACTS On 6-5-2002, a survey under section 133A was conducted at the business premises of the assessee in which it was found that the assessee's books of account had been written only up to 26-4-2002 and thereafter no entries were made till the date of survey. The assessee filed its return of income declaring certain income along with audited…

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