Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment years 1968-69 and 1969-70 - ITO noticed certain cash credit entries in books of assessee firm in name of some customers - On enquiry, assessee explained that those entries represented short term loan obtained by one of its partners from 'HP' and said amount had been credited in name of above customers as money was due from said customers on account of material delivered to them - ITO held that transaction with 'HP' had not been proved as genuine and added amount in question - Tribunal noted specific items of evidence brought on record by assessee i.e., original promissory notes or hundis on which loans were obtained from 'HP', books of accounts of 'HP', discharge receipts furnished by 'HP' and statement of assessee before revenue and thereafter accepted assessee's explanation and thus deleted addition - Whether in view of aforesaid evidence brought on record by assessee, finding of Tribunal could be said to be perverse or one which no reasonable could have arrived at on basis of evidence on record - Held, no FACTS The assessee firm carried on the business of dealing in sugar under the control of the government. While completing its assessment, the ITO noticed certain cash credits entries in the accounts of the assessee-firm, in the names of some customers. The assessee stated that the said amount represented a short-term loan obtained by 'C', one of the partners of the assessee firm, from 'HP'. It was stated further that the said amount had been credited in the name of the customers as money was due from the said customers on account of sugar delivered to them under Government permits and that on receipt of payments from the said parties, the amount of loan had been repaid to 'HP'. The ITO held that the transaction of the assessee with the 'HP' had not been proved to be genuine and that the said amount represented the assessee's income from undisclosed sources. The said amount was added to the total taxable income of the assessee. Before the AAC, a representative of 'HP' appeared with their books of account to corroborate the loans. Copies of the accounts with copies of hundies were filed before…

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