Section 69D inapplicable where borrowal documents were promissory notes, not hundies, and factual finding stood undisturbed.

Section 69D of the Income-tax Act, 1961 was held inapplicable because the documents relied on for the borrowals were found to be promissory notes, not hundies. The Tribunal's finding on the character of the documents was one of fact and was not interfered with. The Court also followed its earlier view on the same issue, resulting in the questions being answered in favour of the assessee and against the revenue.

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Issues: Whether section 69D of the Income-tax Act, 1961 applied to the borrowals evidenced by the assessee's documents, and whether those documents were hundies within the meaning of that provision.

Analysis: The documents executed in favour of the creditors were found by the Tribunal to be pronotes and not hundies. That finding was one of fact and did not call for interference. The issue had already been considered in an earlier decision of the same Court, which had taken a view against the revenue.

Conclusion: Section 69D of the Income-tax Act, 1961 was held not applicable, and the documents were not treated as hundies. The questions were answered in favour of the assessee and against the revenue.

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