1985 (7) TMI 380

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...., Vice-president - The ITO found that the assessee repaid cash hundi loans of Rs. 10,000 each taken from two persons Shanti Ramchand Ahuja and Jammnadas Biharilal. Since the payment was made in cash, he invoked section 69D and made an addition of Rs. 20,000 to the total income of the assessee. On appeal the Commissioner (Appeals) upheld the addition. This is challenged in the appeal before the Tri....

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....on the same issue for assessment year 1979-80. For the Department stress is laid on the orders of the authorities below. The assessee had frequent dealings in hundi transactions earlier. In the statement submitted before the ITO the assessee had used the word `hundi only. To other hundi bankers payments have been made by cheque. The alleged agitation in Dena Bank, therefore, should not be a reason....

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....ounts were not borrowed or repaid by account payee cheque. In other words, does section 60D give authority to the ITO to tax an amount as income even though as a matter of fact supported by all complete evidence, it is known to be only a loan. Apart from the fact that an affirmative answer to this question would enlarge if not completely distorted the provisions of the Income-tax Act taxing income....

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....payment strengthens the above view, since the question would arise as to what is includible on the borrowing basis could be equally includible on the repayment basis. In the present case, the evidence on record does not indicate that the loan is not genuine. The question, therefore, of addition does not arise. Naturally the question of previous year which is relevant for assessment only also is no....