COMMISSIONER OF INCOME TAX Vs. RAM PRASAD RAM BHAGAT

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961 (hereinafter called "the Act"), we are concerned with the assessment year 1968-69. The assessee is a Hindu undivided family with Ram Kumar Agarwal as karta. The Hindu undivided family carried on business in kirana and foodgrains.

(2.) THE facts calling for the reference in brief are as hereinafter stated. In the books of the assessee were entered loans of Rs. 10,000 each from Shrimati Bimla Devi and Shrimati Geeta Devi. When called upon to explain the cash credits, the assessee asserted that these were monies of the two ladies and in respect of which they had made declarations under Section 24 of the Finance (No. 2) Act, 1965, under which they had paid income-tax of Rs. 750 each. THE stand of the assessee was supported by confirmatory letters sent by the two ladies. THE Income-tax Officer did not accept the version of the assessee. He did not accept that they were genuine deposits of the two ladies, as they had never been assessed to income-tax. He, therefore, after rejecting the stand of the assessee, treated these sums aggregating to Rs. 20,000 as income of the assessee from "other sources".

(3.) FOR the reasons stated above, I am of the view that on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the Appellate Assistant Commissioner in deleting the addition of Rs. 20,000. The reference is thus answered in favour of the assessee and against the Revenue. There shall, however, be no order as to costs.