Law:

Section:

Section 69 of the income-tax act, 1961-Unexplained investment-Assessee claimed to have advanced loan in 1959 from out of return of earlier loan given in 1955 and sale proceeds of ornaments in 1955-Whether tribunal justified in law in up-holding addition by ITO of impugned loan as income from undisclosed source-Held, on facts, yes Facts The assessee was an agent of a private limited company. In the course of assessment for the assessment year 1960-61, in relation to the financial year 1959-60, the assessee claimed to have advanced Rs. 55,000 to B. He attributed its source to (i) return on 4-9-1959 of loan of Rs. 30,000 given by her to M in 1955; and (i7) sale proceeds of ornaments worth Rs. 28,298 in 1955. The ITO did not accept the assessee's explanation and treated the entire amount of Rs. 55,000 as her income for undisclosed source. The AAC, however, accepted the assessee's version regarding the first loan of Rs. 30,000 and reduced the income to this extent. The Tribunal rejected assessee's appeal regarding the remaining addition of Rs. 25,000 but accepted the revenue's appeal regarding the deletion of Rs. 30,000 by the AAC on the ground that there was neither any material or record to show the source of the alleged advance in 1955 of Rs. 30,000 to M and the date of such advance, nor any evidence to show that M was a genuine person, who repaid the loan on 4-9-1959. The Tribunal did not attach any importance to the assessee's claim that she had filed returns for the assessment years 1956-57 to 1959-60 wherein she had disclosed the interest earned by her on this loan of Rs. 30,000 as these assessments had been completed without proper scrutiny. On reference, the assessee challenged the findings of the Tribunal on the basis of an affidavit filed by her before the High Court. Held Since the affidavit relied upon by the assessee was not a part of the statement of the case, it was not possible to consider the facts mentioned therein. On the facts and circumstances, the Tribunal had material to disbelieve the assessee's explanation regarding Rs. 30,000 alleged to have been received from M and treat the same as assessee's income. The Tribunal was also justified in…

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