- (1.) The appeal of the assessee relates to the Assessment Year 2003- 04. The assessee is a company engaged in manufacturing and trading of activated bleaching earth. The assessee, in the relevant year, had credited account of six persons in the books of accounts as having received advance by way of unsecured loans from those persons to the extent of Rs.15,00,000/-. The Assessing Officer, by applying Section 68 of the Income Tax Act (hereinafter referred to as the Act), treated the said amount as income of the assessee chargeable to tax. The appeal of the assessee before the Commissioner of Income Tax (Appeals) failed. The Tribunal also, by the impugned order dated 20.07.2007, upheld the order of the Commissioner of Income Tax (Appeals) as well as that of the Assessing Officer.
(2.) Aggrieved, the assessee has preferred this appeal, which has been admitted on the following substantial question of law :- "When cheques received by assessee admittedly were not presented for collection in Bank, can it be said that amount mentioned in the cheques is found credited in the books of assesee attracting Section 68 of Income Tax Act, 1961."
(3.) We have heard Sri Nikhil Agarwal, learned counsel for the assessee and Sri Krishna Agarwal, learned counsel for the respondent.;