Law:

Section:

Section 68, read with sections 131 and 133, of the Income-tax Act, 1961 - Cash credits - Whether in terms of section 68, it is incumbent on assessee to produce satisfactory evidence regarding creditworthiness of individual shareholders and genuineness of investment recorded in books of company in their names - Held, yes - Whether once materials are produced and explanation is given, onus is discharged and shifted on revenue and it is incumbent on assessing authority to inquire into and consider same - Held, yes - Whether where subscriptions were dealt with through nationalised banks and receipts were received by cheques and particulars of income-tax files of subscribers who had purchased shares were given, it was incumbent on taxing authority to enquire into same and find out creditworthiness of subscribers and genuineness of transaction and then come to a conclusion - Held, yes - Whether until such enquiry was made, it could not be said that authority had acted upon materials so disclosed - Held, yes - Whether, in such circumstances, case should be remanded back to Tribunal for a fresh consideration - Held, yes Section 256 of the Income-tax Act, 1961 - High Court, reference to - Question of law - Whether findings of fact may also form a basis of a question of law if inference drawn from facts found is not in consonance with legal principles or findings are perverse and in such a case High Court may interfere - Held, yes - Whether if two views are possible, even if High Court is of other view, it cannot interfere with view taken by taxing authority - Held, yes FACTS The assessee-company allegedly invited subscriptions from the public through advertisement in the newspapers. Those subscriptions were dealt with through the nationalised banks and the receipts were received by the cheques. In the proceedings, the assessee disclosed the names and addresses of each of the subscribers. The Assessing Officer issued notice upon 37 subscribers on that basis. Out of 37 persons, 10 persons appeared and produced satisfactory evidence regarding the genuineness about the persons and sources of funds out of which the shares were subscribed, about 14 persons did not respond,…

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