TaxTMI 
TaxTMI 
1975 (9) TMI 57
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....in cash from certain hundi bankers stationed at Madras. The narration also stated that the actual dates of the receipt of the moneys were sometime early in January, 1961. On these hundi loans interest amount of Rs. 37,433 was claimed. There was also an interest claim of Rs. 5,260 in respect of loans taken by the assessee apart from the hundi bankers. In the original assessment order the ITO disallowed the interest on the hundi as well as interest of Rs. 5,260 as not being for the purpose of business. The assessee appealed. The AAC set aside the order and directed the ITO to go through the matters once again on the ground that the assessee has an explanation that these amounts represent redeposit of amounts withdrawn earlier. 3. For the a....
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....he purpose of showing these loans was only to get a deduction for interest payment and not to being in any undisclosed income as loans because the credits of these amounts are almost immediately followed by debits withdrawing the amounts in its entirety. He also noticed that the ITO has accepted the considerable amount of creditors appearing in the assessee's own capital account which could come only from the amounts withdrawn by the assessee from the business earlier. In these circumstances he felt that there was no justification for the addition of Rs. 1,05,000 and Rs. 75,000 in the asst. yr. 1963-64 and 1964-65. For the same reason the addition made in 1961-62 was also cancelled. 6. The Department has come up on appeal for all the thr....
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....aining to the hundi loans in the asst. yr. 1963-64. Nothing has been done by the assessee to prove the genuineness of the loans excepting a claim by him that the loans are genuine. The ITO will be fully justified on these materials to hold that the hundi loans have not been proved both for the asst. yrs. 1963-64 and 1964-65. 9. Certain alternative contentions had been taken before the AAC that even if the hundi loans have not been proved, no additions could be made. The first contention raised was that these receipts could be explained as re-deposits of moneys withdrawn earlier. The assessee has given the total of the withdrawals in the course of the year relevant to the asst. yr. 1963-64 at Rs. 5.95 lakhs but a total will not be helpful....
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....he availability of the agricultural income. The agricultural income is round about Rs. 20,000 per year and if we were to hold that all these have been saved some additional evidence must be produced. Mere arithmetical statement showing the total of the agricultural income for the last six or seven years would not by itself become an evidence. It was noticed by the AAC that the credits appearing in the assessee's own capital account have been accepted as genuine and therefore the same treatment should be applied to the two amounts shown as loans. That the ITO was satisfied that the credits appearing in the capital account were genuine was because it was supported by the earlier withdrawals. In order to show that the characteristics of these ....