Cash credit explanation upheld where creditor had sufficient funds and later enquiry did not displace the factual finding.

An assessee's cash credit was accepted as satisfactorily explained where the creditor was found to have sufficient funds to advance the amount, and that factual finding was upheld by the Tribunal. Subsequent reopening of the creditor's assessment and further enquiry did not displace the conclusion that the assessee had adequately explained the credit. The Tribunal was therefore right in sustaining deletion of the addition.

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Issues: Whether the Tribunal was right in holding that the Appellate Assistant Commissioner was justified in deleting the addition of Rs. 17,000 on account of the cash credit in the assessee's account.

Analysis: The assessee's explanation regarding the cash credit was accepted by the Appellate Assistant Commissioner on the finding that the creditor had sufficient funds to advance the amount. That finding was upheld by the Tribunal. The reopening of the creditor's assessment and further enquiry did not displace the Tribunal's finding that the assessee had satisfactorily explained the cash credit.

Conclusion: The Tribunal was right in upholding the deletion of the addition of Rs. 17,000. The question referred was answered in the affirmative, in favour of the assessee and against the revenue.

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