The assessment of the genuineness of cash credits is a question of fact, and the conclusion of the IT authorities based on evidence is crucial in determining the admissibility of cash credits and deductions.

BHAGABATI PRASAD BANERJEE, J.

1. THE Tribunal has referred the following two questions of law before this Court under s. 256(2) of the IT Act, 1961 :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee discharged its onus to prove the genuineness of cash credits of Rs. 2,60,000 appearing in his books of account in the name of Sugar Suppliers (P.) Ltd. ?

(2) If the answer to question No. 1 is in the negative, whether the Tribunal was justified in law in holding that the interest of Rs. 10,784 paid to Sugar Suppliers (P.) Ltd. was an admissible deduction in computing the total income of the assessee ?"

2. THE assessment year involved is the asst. yr. 1974-75 for which the relevant accounting year ended on March 22, 1974. THE question in this particular case is whether the assessee has been able to discharge the onus cast upon it under the law for proving the genuineness of the cash credits. THE question of discharge of onus is a question of fact. THE Supreme Court in the case of CIT vs. Orissa Corporation (P.) Ltd. (1986) 52 CTR (SC) 136 : (1986) 159 ITR 78 (SC), has held that if the conclusion of the IT authorities was based on some evidence on which the conclusion could be arrived at, no question of law arises in connection with cash credits. This Court in the case of CIT vs. Lohaty Bros. (P.) Ltd. (1986) 153 CTR (Cal) 150 : (1987) 164 ITR 730 (Cal)held that where the Tribunal, on a review of the evidence that was on record, came to the conclusion that the cash credits had been proved and deleted the additions and no question of perversity had been raised by the Department, the question of discharge of onus was always a question of fact and whether the High Court agreed with the finding of fact made by the Tribunal or not was not material. In this particular case no question of the perversity of the findings made by the Tribunal has been raised. THE Tribunal held that the assessee was able to discharge the onus of proving the genuineness of the cash credits concerned. THE Tribunal had come to a conclusion based on evidence on record. In that view of the matter and in view of the aforesaid decision of the Supreme Court as also this Court, both questions of law in this reference must be answered in the affirmative and in favour of the assessee. There will be no order as to costs.