Law:

Section:

Section 250 of the Income-tax Act, 1961 - Commissioner (Appeals) – Powers of – Assessment year 1962-63 – Cash credits appearing in name of 'P' in assessee's books of account – On basis of sworn affidavit of 'P' according to which 'P' had accepted that he had given loan to assessee of amount of cash credit, AAC deleted its inclusion in assessee's income – However, Tribunalheld that assessee had failed to establish that loan was genuine loan and treated it as assessee's income from undisclosed sources – Whether since Assessing Officer had not objected to affidavit of 'P' before AAC, it was valid piece of evidence and AAC did not commit any illegality in admitting it in evidence and acting upon it – Held, yes – Whether Tribunal had no jurisdiction to exclude affidavit, which was most material evidence so for as assessee was concerned, in order to substantiate his plea of loan and, therefore, its finding of fist was not sustainable in law - Held, yes FACTS The ITO found in the books of the assessee- HUF a cash credit in the name of 'P'. The ITO had information that the creditor was a man of little means and this amount represented the assessee's own income. He found that the other assessees who had shown credits in the name of 'P' had owned up that the credits were not genuine. The assessee was asked to explain and prove the genuineness of this loan. In reply, the assessee stated that no money was received and the credit was given under advice from certain company. There was also a debit of an amount. On the same date in the name of 'M' on which interest payment was claimed, the ITO held that the assessee had not proved the loan and treated the amount as income from other sources and added it in the assessment. The AAC held that while disallowing interest paid to 'M', the ITO held that he was not a genuine party but while considering the credit from 'P' he allowed the interest to 'M' as genuine payment. An affidavit sworn by 'P' was produced before the AAC according to which he had accepted that he had given a loan to the assessee. The AAC accepted the contents of the affidavit and held that the total credits in the last two years had remained constant and there…

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