TaxTMI 
TaxTMI 
2009 (6) TMI 60
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....t in the name of R. Subramanian and the assessing authority did not accept the claim that this was a genuine credit from the said person and he treated the said sum as the assessee's income from undisclosed sources under section 68 of the Income-tax Act, 1961. The assessee also claimed deduction of Rs.14,580 as interest on such credit and as it represented the interest on the alleged debt, the same was disallowed by the assessing authority. 2. Against the said order of the assessing authority, the assessee filed appeal before the Commissioner of Income-tax (Appeals) and the Commissioner (Appeals) after enquiry and on production of the alleged letter of confirmation from a third party creditor of the assessee, the Commissioner of Income-tax....
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.... of the creditor and source from which he received the money ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in reversing the order of the Commissioner of Income-tax (Appeals) when the identity of the person, his creditworthiness and genuineness of the transaction in respect of cash credit in the name of R. Subramanian have been established by the appellant ?" 5. We have heard learned counsel appearing for both the parties elaborately. 6. The assessee's main contention was as far as the loan transaction is concerned, he was able to produce evidence, viz., on the examination of R. Subramanian, before the assessing authority stating that Rs. 90,000 was advanced by him and it was his money and apart f....
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....of Rs.10,000 on May 21, 1991, and thereafter issued a bearer cheque in the name of the assessee herein on January 25, 1991. He has also further deposited a sum of Rs. 30,000 on June 6, 1991, and then issued a bearer cheque for an equal amount in favour of the assessee". 8. Thus, even the bank transactions clearly indicated that the transaction was done after deposits were made only on the previous dates and on the next date it was given as bearer cheque and it was also not explained why a new account was opened when already there existed another account. 9. Taking into consideration, the reversal of the stand of the said R. Subramanian, before the authority concerned, the authority rightly rejected the theory of funding of money by R. Sub....
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....urce where it was kept, whether it was in the house or in the bank. So the said Subramanian has contradicted every statement of his and as rightly pointed out both by the assessing authority and then by the Tribunal, the evidence of the said Subramanian could not be relied upon and rightly the assessing authority and the Tribunal had come to the conclusion that the transactions as stated by the assessee in respect of the loan cannot be believed and this transaction can only be treated as income for the relevant year. Admittedly, the deduction claimed by the assessee towards interest could not also be allowed as expenditure. In that regard both the assessing authority as well as the Tribunal has rightly disallowed the interest portion also. ....