T. N. C. RANGARAJAN, J.

( 1 ) THE short facts leading to this reference are that the assessee had borrowed some money on hundis and repaid the same during the previous year ended 31/03/1978, corresponding to the assessment year 1978-79, through demand drafts. The Income-tax Officer noted that section 69d provides for disallowance of any amount repaid otherwise than through an account payee cheque drawn on a bank. He was of the opinion that repayment by demand draft did not satisfy the condition and added back the sum of Rs. 11,600 with interest thereon totalling Rs. 1,744 in computing the total income of the assessee. The assessee appealed and contended that there can be no distinction between an account payee cheque and a demand draft, but the Commissioner of Income-tax (Appeals) confirmed the disallowance. On further appeal, the Appellate Tribunal considered the various decisions cited before it regarding the nature of a cheque and a draft, and came to the conclusion that so far as the payment to the drawer of the hundi is concerned, the effect of the account payee cheque as well as the demand draft, would be the same and, therefore, the provisions of section 69d should be taken

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