1976 (4) TMI 44

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.... the reasons as in the case of other hundi loans ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in placing on the department the onus of proving that it was the assessee's own money which was introduced in his business in the guise of bogus hundi loans? 3. If the answer to question No. 2 be in the negative, then whether the Tribunal was right in law in holding that there was no justification for treating any of the hundi loans to be the assessee's undisclosed income and in deleting the whole of Rs. 45,000 and the interest claimed thereon retained by the Appellate Assistant Commissioner on this account." The assessment year involved is 1959-60, the relevant previous year being the calenda....

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....ine. In response to the said notices the first four creditors again confirmed the loans which had been granted to the assessee but did not produce their books of account. The creditor, Seth Naraindas Hotchand, stated that he did not maintain any books of account but reiterated that the loans had been verified from his documents. The proprietor of Naraindas Hotchand informed the Income-tax Officer that at the time of the service of the summons under section 131 of the Income-tax Act, 1961, he had left Calcutta but asked for another date for personal appearance. The Income-tax Officer did not fix any date for further appearance of Naraindas Hotchand but completed the assessment. On the basis of the notorious practice prevalent in or abo....

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.... very inception of his business from various hundi brokers and the manner in which the said loans were utilised. It was submitted that in the absence of adequate security the assessee was not in a position to obtain overdraft loan from any bank and had to depend upon the hundi broker. It was contended that the assessee had discharged the onus of showing that the creditors were real persons who had acknowledged the factum of the loans and thereafter it was for the revenue to prove that the loans were fictitious and represented the concealed income of the assessee. Apart from notice taken of the alleged hundi racket there was no evidence to support the contentions of the revenue. It was contended on behalf of the revenue that in fact a hun....

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....tive evidence had been adduced by the assessee which was accepted by the Tribunal. To reiterate, such positive evidence is (a) the existence of the creditors, (b) the assessment file numbers of the creditors, (c) the confirmation letters of the creditors in support of the assessee's claim, and (d) books of account at least in the case of one creditor, i.e., Bhagwandas Purushottamdas of Bangalore, and (e) the discharged hundis. The Tribunal has duly taken note of such positive evidence and the fact that there was no contrary evidence forthcoming from the revenue. The revenue only relied on the prevalent practice of utilising fictitious hundis through bogus persons. It appears to us that the Tribunal accepted the evidence of the assessee as s....