1984 (4) TMI 119

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....elate to asst. yr. 1979-80 and the assessee's accounts had entries of the following loans: (1) Shri Bhairam Balaji Rs. 10,000 . Interest " 927 (2) Shri Narendrakumar Motilal " 4,000 . Interest " 125 (3) Shri Rajkumaribai " 29,000 . Interest " 1,236 The ITO treated these amounts as borrowed on a hundi and taxed them under the provision of s. 69D of the IT Act. An appeal pre....

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.... laboured attempt by saying that hundies are drawn only in big cities. Sec. 69D was thus not applicable to the facts of the case. Realising this, the assessee moved an application under s. 154 before the ITO and the ITO, by an order dt. 30th Dec., 1980, rectified the mistake. It was conceded in that order that s. 69D did not apply and two of the loans in favour of Narendrakumar and Rajkumari were ....

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....nt to tax the amount without consideration of any explanation of the assessee under s. 68 the amount can be taxed only if the assessee fails to satisfy the ITO. The ITO did not proceed on the lines of s. 68 and did not consider the explanation offered by the assessee about the nature and source of the aforesaid amounts. In the order passed under s. 154, he had felt satisfied about two of the three....