2011 (4) TMI 1161

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....to the assessment year 1999-2000.   2. The appeal was admitted by this court for determination of the following substantial question of law :   "Whether on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal is right in holding that section 68 of the Income-tax Act, 1961 does not apply to the co-operative bank for assessing the unexplained credits as taxable income ?"   3. The facts, in brief, necessary for adjudication as narrated in the appeal, are that the respondent-assessee is a co-operative society. It filed return of income for the assessment year 1999-2000 on June 29, 1999 declaring "nil" income. Later on, vide letter dated February 1, 2000, the assessee was informed that....

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....asses-see-bank under section 68 of the Act, where the Revenue had not estab-lished that there was connivance of the said account holders with the assessee-bank ?   6. The Tribunal on appreciation of evidence came to the conclusion that there was no nexus of the said creditors with the bank and, therefore, the same could not be treated to be unexplained credits of the assessee. The findings recorded by the Tribunal in that behalf in paras 34 to 40 are as under (pages 111-112 of 314 ITR (AT) :   "Further, even on the merits, the addition was uncalled for. Con-cerning account Nos. 8211, 8212 and 8213, the introducer was Shri Vijay Sethi, the deceased managing director of the assessee-bank itself. The original investments were m....