MANGILAL JAIN Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) TAX Case Appeal under Section 260A of the Income TAX Act, 1961 against the order of the Income TAX Appellate Tribunal, Madras 'B' Bench, Chennai, dated 07.08.2001 in I.T.A.No,2693/MDS/1995 relating to the assessment year 1992-93. The assessee is the appellant. The assessee is an individual deriving income from business as a dealer in radio and spare parts. In the course of the assessment proceedings for the assessment year 1992-93, the Assessing Authority found that there was a total sum of Rs.90,000/- appearing as credit in the assessee's books of account 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 assessee's income from undisclosed source u/s.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 C.I.T (Appeals) and the Commissioner after enquiry and on production of the alleged letter of confirmation from a third party creditor of the assessee, the C.I.T.(Appeals) directed the Assessing Officer to treat the loan of Rs.90,000/- as genuine and also to allow the claim of interest on the loan. The Department aggrieved against the said order of the C.I.T.(Appeals) preferred an appeal before the Income Tax Appellate Tribunal.

(3.) WE have heard the learned counsel appearing for both the parties elaborately.