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[2007] 293 ITR 70 (Gujarat) HIGH COURT OF GUJARAT Gujarat Fertilisers v. Commissioner of Income-tax R.S. GARG AND M. R. SHAH, JJ. IT REFERENCE NO. 227 OF 1995 JULY 31, 2006 Section 68 of the Income-tax Act, 1961 - Cash credits â–  Where alleged creditor had no money with him, he was having certain agricultural lands and from agricultural operations, he could hardly meet both ends, cash credit shown in his name could not be taken as genuine Where the Assessing Officer, when he was making a fact-finding inquiry, examined some of the creditors and after a thorough cross-examination, he was successful in obtaining the information from the creditor that he had no money with him, he was having certain agricultural lands and from the agricultural operations, he could hardly meet both the ends, the alleged cash credit in the name of creditor could not be held to be genuine. CASE REVIEW Murlidhar Lahorimal v. CIT [2006] 280 ITR 512 (Guj.) distinguished. JUDGMENT R.S. Garg, J. - Mr. S. N. Divetia, learned counsel for the assessee, and Mrs. Mona M. Bhatt, learned counsel for the Revenue, are heard. At the instance of the assessee, the Tribunal has referred the following questions to this court for our opinion : "1. Whether, on facts and in law, the Tribunal was justified in upholding the action under section 147(a) of the Income-tax Act, 1961 ? 2. Whether, on facts and in law, the Tribunal was right in treating the said cash credits as not genuine and sustaining the addition made of Rs. 66,475 ?" We will take up the second question first as it was vehemently argued by learned counsel for the assessee that the findings regarding the cash credit entries that those were not genuine, are perverse findings. Learned counsel for the assessee submitted that the basic burden to prove the source of money would be on the assessee, but, he is not required to prove the sources of the source and as the taxing authorities and the Tribunal made an inquiry into the sources of the source, i.e. source of the person who deposited the money, the findings are perverse. In support of his submission, he has relied upon a Division Bench's of this court in the matter of Murlidhar Lahorimal v.…

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