COMMISSIONER OF INCOME TAX Vs. S SANKARAN

JUDGEMENT

(1.) AT the instance of the Revenue, the following questions of law have been referred to us by the income-tax Appellate Tribunal, Madras Bench "A" :

(2.) THE assessment year with which we are concerned is 1973-74. THE asses-see had filed a return admitting an income of Rs. 11,710. THE assessee had also reported cash deposits ranging from Rs. 3,000 to Rs. 8,000 in the names of three individuals. It was his case that he had borrowed those amounts from those persons for the purpose of business. He had also claimed that he paid interest of Rs. 1,490 on those loans. THE Income-tax Officer, after the receipt of the return from the assessee, wrote to him on December 13, 1975, calling upon him to explain the new credits and to produce the books of account of the business. After the receipt of that letter, the assessee admitted that the amounts shown as borrowings were to be assessed as part of his income. THE assessee's explanation was that it was not possible for him to ascertain the present whereabouts of those individuals and produce further documentary evidence to establish that those persons have given loans to the assessee. This prompted the Assessing Officer to hold that the assessee was guilty of concealing this income and proceed to levy a penalty.