Law:

Section:

Section 68 of the income-tax act, 1961-Cash credits-Assessee, whose books showed cash credit in name of one D filed confirmatory letter from D but was not able to produce him and explain nature and source of deposit as required by Ito-Ito found that loan was not genuine and treated amount as assessee's income from undisclosed sources-Before AAC, assessee contended that by filing confirmatory letter it had discharged initial onus and also that in immediately preceding year a sum found in name of one R was added to income of assessee and as impugned deposit was made after withdrawal made in account of R, it should be treated as deposit coming out of withdrawal of R-Aac rejected both contentions-Tribunal, however, accepted second contention of assessee on the ground that (i) cash credit found in name of R had been confirmed as income from undisclosed sources of assessee ; (ii) assessee in course of argument accepted that the money belonged to it ; (iii) deposits made in immediately preceding year were withdrawn and thus availability of fund more than deposit appearing in name of D, was there ; and (iv) deposit in name of D came after withdrawal made in name of R-Whether, where initial plea taken by assessee before ito has been found incorrect, assessee could take alternative plea before aac to explain source of money introduced-Held, on facts, yes Section 256(2) of the income-tax act, 1961-Reference-Question of fact-Whether, in view of facts mentioned under the head 'cash credit', inferences of tribunal were findings of fact and no question of law arose therefrom-Held, on facts, yes Facts The assessee's books showed a cash credit in the name of one D. On being called upon by the ITO to explain the nature and source of the deposit, the assessee filed a confirmatory letter from D but was not able to produce him as required by the ITO. The ITO, therefore, treated the impugned amount of Rs. 28,000 as the assessee's income from undisclosed sources. In appeal before the AAC, the assessee contended firstly, that by filing the confirmatory letter it had discharged the initial onus that was on it and secondly, the assessee submitted an alternative contention that in the…

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