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Issues:
Appeal against deletion of addition to income from undisclosed sources based on cash credits in account books during assessment proceedings for the year 1966-67. Analysis: 1. The Income Tax Officer added Rs. 53,590 to the assessee's income as income from undisclosed sources due to unproven cash credits in the account books. 2. The Appellate Assistant Commissioner set aside the initial assessment and directed further investigation, leading to the assessee producing confirmatory letters and assessment orders of the creditors. 3. The Income Tax Officer rejected the evidence provided by the assessee and added the sum to her income, suspecting the genuineness of the cash credits. 4. The Appellate Assistant Commissioner disagreed with the Income Tax Officer, observing that the assessee had discharged her burden of proof by providing necessary evidence, and deleted the addition to income. 5. The department appealed against the Appellate Assistant Commissioner's decision, leading to the case being heard by the Appellate Tribunal. Analysis Continued: 6. The Tribunal found that the assessee had indeed proven the genuineness of the cash credits by producing confirmatory letters from the creditors, who were income tax assessees. 7. The Tribunal highlighted that the Income Tax Officer had the power to summon the creditors for verification but failed to do so, despite the creditors being established income tax assessees. 8. Referring to a previous High Court decision, the Tribunal emphasized that once the identity of the creditors was established, the burden shifted to the department to prove the cash credits' fictitious nature. 9. Since the Income Tax Officer did not take necessary steps to verify the credits, the Tribunal upheld the Appellate Assistant Commissioner's decision to delete the addition to income from undisclosed sources. 10. The Tribunal dismissed the department's appeal, affirming the decision to delete the addition of Rs. 53,590 to the assessee's income.
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