DULICHAND GULSARI LAL JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners by this writ petition have challenged the validity of Section 69D of the Income-tax Act, 1961, as being unconstitutional. THE petitioners have also prated that the excluding of the loans taken on hundi and interest paid thereon from the total income of the assessee may be ordered.

(2.) PETITIONER No. 1 is a registered firm and petitioner No. 2 is one of the partners. The petitioners are carrying on business in cloth. Regular books of account have been maintained. For the purpose of accounting, the Diwali year is followed. During the accounting year, Diwali 1977-78, relevant to the assessment year 1979-80, the Income-tax Officer, A-Ward, Jabalpur, found that the assessee had taken hundi loans in cash from various parties after April 1, 1977, in the following manner : <FRM>JUDGEMENT_753_ITR226_1997Html1.htm</FRM>

(3.) IT may be relevant to mention that Section 69D of the Income-tax Act was added in the Income-tax Act by the Taxation Laws (Amendment) Act, 1975 (Act No, 41 of 1975), with effect from April 1, 1977.