Law:

Section:

Income-tax--- ----Reference---Assessment--Cash credits--Creditors identified, appearing in proceedings, admitting the advancement of loans to assessee---Confirmation letters filed---Sums advanced by cheque and repaid with interest by cheque--­Copies of Bank Statements filed---Tribunal on facts holding credit entries genuine---Justified---No question of law arises ---Assessee not bound to prove source of loans---Indian Income Tax Act, 1961, S.256(2). The assessee derived income as a commission agent. During the assessment proceedings for the assessment year 1986-87, the Assessing Officer noticed four cash credit entries in the books of the assessee and, taking the view that all the four credit entries were bogus and fictitious and represented the unaccounted income of the assessee, made an addition of Rs.2,66,360 to the assessee's income. The Tribunal found that the moneys had been advanced by account payee cheques, arid had been returned by the assessee with interest by account payee cheques, that copies of bank statements had been filed, that the creditors had filed confirmation letters, had appeared before the Commissioner (Appeals), and admitted having advanced money to the assessee and had filed returns of their incomes. The Tribunal, therefore, took the view that all the cash credits stood duly explained by sufficient evidence and, therefore, there was no justification for any addition for any of the cash credit entries. The entire addition was thus deleted. On an application to direct a reference Held, dismissing the application that no question of law arose from the Tribunal's order. The finding of fact given by the Tribunal was based on the material on record. The Tribunal correctly took the view that the assessee was not bound to prove-the source of the loans. Suspicion, however, strong, could not take the place of evidence or proof. JUDGMENT N.K. AGRAWAL, J.---This is a petition under section 256(2) of the Income Tax Act, 1961 (for short, "the Act"), by the Commissioner of Income-tax, seeking a direction to the Income-tax Appellate Tribunal, New Delhi (for short, "the Tribunal"), to refer the following question of law. to this High Court for opinion:…

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