AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (2) of the Income-tax Act, 1961, for the assessment year 1974-75, the following question of law has been referred to this court :"whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee-company claimed before the Income-tax Officer that the unexplained deposits represented short-term loans advanced by one M/s. Hukumchand Santalal of Post Office Sonada, Darjeeling, the Tribunal was justified in holding that the cash credit appearing in the books of the assessee amounting to Rs. 1,28,639 should be treated as income of the assessee-company from its tea business thus allowing the benefit of exemption under Rule 8 of the Income-tax Rules, 1962, even though the assessee did not discharge the onus of proving the source of the deposits ?"

( 2 ) WE reframe the question as follows :"whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the cash credit appearing in the books of the assessee amounting to Rs. 1,28,369 should be treated as income of the assessee-company from its tea business ?"

( 3 ) SHORTLY stated, the fact is that the Income-tax Officer, in the course of the examination of the books of account, detected a current account in the name and style of " Kayah" in the assessee's tea garden books. The entire account has been annexed to the relevant assessment order as annexure "a". The account reflected income and outgoing of cash from January 25, 1973, to December 31, 1973, leaving a credit balance of Rs. 51,717. 67 which was carried forward. The assessee, according to the Income-tax Officer, did not comply with his requisition for proving the nature and source of the cash credit account, though, however, it was lastly claimed to have been the amount of one M/s. Hukumchand Santalal, P. O. Soneda, Darjeeling, who admitted this by letter dated February 25, 1977, and also supplied the Income-tax Officer with a copy of the details and payments in that account from January 1, 1973, to December 31, 1973. The Income-tax Officer found discrepancies in the accounts while tallying the parties' statements with the assessee's accounts. The said party was not an income-tax assessee and, in those circumstances, the Income-tax Officer held that the party had no credit-worthiness and, secondly, the assessee failed to prove the nature and source of the cash credit. In the circumstances, the Income-tax Officer took the peak credit of the incoming and outgoing of the cash which was calculated at Rs. 1,28,369 and the said amount was treated as assessed income from undisclosed sources.

( 4 ) THE assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who held as follows :"in the light of the Calcutta High Court's decision in the case of Daulatram Rawatmull v. CIT [1967] 64 ITR 593, the contentions of the learned representative are well-founded. The Income-tax Officer is, therefore, directed to treat such cash credits as secret income of the assessee from tea business. "

( 5 ) AGAINST the said order of the Commissioner of Income-tax (Appeals), the Department came up before the Tribunal.

( 6 ) THE Tribunal held as follows :"the assessee-company before us has nominal income by way of dividend and interest on securities. These are in fact side income because the assessee's main activity was the cultivation, manufacture and sale of tea. The cash credit account had appeared in the assessee's business books of account. The cash credits continued throughout the accounting period. The assessee itself wanted to include such unexplained cash credits as its income from business. In these circumstances, we have no hesitation to uphold the decision taken by the Commissioner (Appeals ). "

( 7 ) A similar question came up before this court in I. T. Ref. No. 5 of 1984 (CIT v. Hasimara Industries Ltd.), where the judgment by this Bench was delivered on July 25, 1989. There, the Bench

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