TMI Blog1999 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, the several findings of the Tribunal on which its conclusion is based are perverse and/or unsupported by any evidence ?" The assessee is a private limited company which used to be regularly assessed under the provisions of the Indian Income-tax Act, 1922. The year under consideration is the assessment year 1960-61. In the year under consideration, the assessee had shown certain credits on account of hundi loans. The assessment was completed treating these hundi loans as genuine. Thereafter it was brought to the notice of the Income-tax Officer by some employees of the assessee that the hundi loans are not genuine. On the basis, the assessment was reopened under section 147(a) of the Income-tax Act, 1961 (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter of encashment of various cheques by which the assessee had received the loans. Considering the submissions of learned counsel for the assessee, the Commissioner of Income-tax (Appeals) was of the view that the assessee has not discharged the burden to prove the genuineness of the loans and dismissed the appeal. In second appeal before the Tribunal, the Tribunal has also confirmed the view taken by the Commissioner of Income-tax (Appeals). The limited controversy before us is whether the finding of the Tribunal regarding genuineness of the hundi loans is perverse. Learned counsel for the assessee submits that the Assessing Officer has used the statement of some creditors and no opportunity was given to the assessee to cross-exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue, of the creditors has been used to take the hundi loans as not genuine. Before we go into the merits the admitted facts are that the assessee initially claimed the hundi loans. They were accepted by the Assessing Officer in the original assessment order. Thereafter on the basis of information that the loans are not genuine the assessment was reopened under section 147(a) and when the assessee failed to prove that the loans are genuine, the amount of hundi loans were added in the income of the assessee as undisclosed income of the assessee. The assessee has challenged that assessment order on the ground including that reopening is bad in law. The Appellate Assistant Commissioner has set aside the order of the Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter it was open to the assessee to prove that the allegations were unfounded. Shri S. Bagchi, the learned Departmental Representative, contended that the loan creditors who were the assessee's persons and it was for him to produce them for proving the case." "As is clear from the Tribunal's order dated July 23, 1975, the action of the learned Income-tax Officer pertaining to reopening under section 147 was confirmed and the case was remanded for considering the merits of the additions. The reopening having been found and accepted to be in order, it was subsequently for the assessee to prove that the transactions were genuine and the parties had both established the indentities and the capacities. The loan creditors earlier deposed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the confirmatory letters did not discharge the onus that lay on the assessee as no other evidences were laid by the assessee except confirmatory letters, the Tribunal found that there is no material on record even to establish the identity of the creditors. This court has taken the view that on such facts, it cannot be said that the finding of the Tribunal is perverse and answered the question in the negative that is in favour of the Revenue. In the case of Shankar Industries v. CIT [1978] 114 ITR 689, the issue before this court was that whether cash credits can be treated as income from undisclosed sources of the assessee. At page 698, this court has observed as under : "We would like to observe that the law on this point is now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the burden lies on the assessee to prove the genuineness of the hundi loans though he filed confirmatory letters, the notices of which were returned with the remark that "they are not known" at the given address. Even in some cases, it was found from the record that some of the creditors have not advanced the hundi loans to the assessee. When the initial burden is on the assessee to prove the identity of the creditor, the capacity of the creditor to advance the loan and the genuineness of the transaction, thereafter only the Revenue is to prove that the loans are not genuine but when the initial burden has not been discharged by the assessee, there is no question of asking the Revenue to show that it is the income of the assessee. Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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