ADDITIONAL COMMISSIONER OF INCOME TAX Vs. DHARAMDAS AGARWAL

JUDGEMENT

(1.) AS directed by this court in Misc. Civil Case No. 128 of 1973, decided on 16th August, 1978, the Tribunal has stated the case and referred the following question of law for our answer:

(2.) THE relevant assessment year is 1963-64. In the account books the relevant accounting year cash credits amounting to Rs. 1,45,000 were found in ten different names. THE ITO found that the cash credits were not genuine and on this basis he treated the entire sum of Rs. 1,45,000 as income of the assessee from undisclosed sources. In the appeal before the AAC, the assessee contended that the cash credits really represented the income from undisclosed sources which were taxed in earlier years and that they did not represent the income earned in the relevant account year. This explanation was not accepted by the AAC. THE Tribunal, however, accepted this explanation.

(3.) FOR the reasons stated above, we answer the question referred in the affirmative, in favour of the assessee and against the Department. Parties shall bear their own costs of this reference.