1993 (8) TMI 15

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....resent reference under section 256(1) of the Income-tax Act, 1961, raises the following questions for our opinion " 1. Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that in the present case the returned income did not fall short of 80 per cent. of the correct income, referred to in the Explanation to clause (c) of sub-section (1) of section 27....

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....ed in transactions which were not reflected in the regular books of account. Therefore, certain additions were made to the income returned by the assessee. In the present reference, we are concerned only with the addition in respect of cash credit entries for which no evidence was offered by the assessee as regards their genuineness. This amount of addition was originally Rs. 1,22,500, which was r....

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....e relevant time) was not attracted. Hence, the present reference by the Revenue. On a plain reading of the said Explanation to clause (c) of sub-section (1) of section 271, we find that in order to attract the provisions of the Explanation, the assessee would be required to prove that the failure to return the correct income did not arise from any fraud or any gross or wilful negligence on his ....

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....22,500 (as shown in part 3 of the return of the assessee) represented credits in secret business agreed to be in the wrong names, and hence the entries were found not proved to be genuine. On these findings, it is obvious that the assessee has failed to discharge the burden placed upon it by the aforesaid Explanation and, consequently, the presumption under the said Explanation would arise. ....