By K. B. Bhujle, Advocate
New Page 2
41 Deemed income : S. 69D of Income-tax Act,
1961 : A.Y. 1998-99 : Amount borrowed or repaid on hundi : Document represented
bilateral transaction and not on hundi paper : S. 69D not applicable.
[CIT v. Ram Niwas, 170 Taxman 5 (Del.)]
Amongst the documents found in the course of search, one
document was drawn on a letter-head of the assessee and was treated as hundi. On
the basis of the said hundi and the presumption available u/s.69D of the
Income-tax Act, 1961, the Assessing Officer assessed the amount of such hundi in
the assessee’s hands. The Commissioner deleted the addition and the Tribunal
upheld the deletion.
The Delhi High Court upheld the decision of the Tribunal and
held as under :
“(i) The primary requirement for invoking the deeming
provision of S. 69D is that the document must be a hundi and it is only
thereafter that the deeming provision comes into play. The lower authorities
had found that the document was not a hundi. Clearly, the document in question
was not a hundi, because it represented a bilateral transaction and it was
also not on a hundi paper. In the absence of those vital ingredients, the
document could not be described as a hundi and, therefore, the presumption
u/s.69D would not be available to the Revenue.
(ii) The contention of the Revenue that the document was
found from the premises of ‘K’ and, therefore, it must be deemed to be a hundi,
could not be accepted. From where a document is found cannot, by any stretch
of imagination, explain the nature of the document.”
