The burden is on the assessee to explain the nature and source of credits in the books, and Section 132(4a) does not over-ride the specific provision of Section 68.

( 1 ) AT the instance of assessee, following questions have been referred for opinion of this Court under Section 256 (1) of the Income-tax Act, 1961 (in short the act ), by the Income-tax Appellate Tribunal, Delhi Bench a (for short the Tribunal):

"1. Whether on the facts and in the circumstances of the case, the Tribunal was right in its interpretation of the provisions of sub-section (4a) of Section 132 of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in sustaining the addition made by the lower authorities u/s 68 when the cash credits are found in the books of account seized under Section 132?"

( 2 ) THE dispute relates to two years, i. e. , Assessment years 1970-71 and 1972-73. Brief reference to the factual aspects would suffice. A search was conducted in the premises of assessee on 8/12/1972 under Section 132 of the Act. During the course of search, certain books of account and other documents were seized by the authorised officials. Certain cash credits were noticed in the books of account seized. At the time of assessment for the Assessment Years 1970-71 and 1972-73, income-tax Officer sought to include these cash credits under Section 68 of the Act in assessee s income and asked the assessee to explain the sources of these cash credits. Explanation was offered by the assessee which was not found acceptable and, therefore, additions of Rs. 43,882. 00 and Rs. 52,245. 00 were made under Section 68 of the Act for the two years respectively. Assessee preferred appeals before the appellate Assistant Commissioner (in short the aac ). After examining the materials brought on record, AAC sustained the addition to the extent of Rs. 35,170. 00 for the assessment Year 1970-71. Though he deleted the addition for the Assessment Year 1971-72, he directed enhancement of income for the Assessment year 1972-73 by adjusting the extra peak credit of Rs. 3,265. 00. Assessee carried the matter in appeals before the Tribunal. One of the main grounds urged by the assessee before the tribunal was that in view of provisions of Section 132 (4a) of the Act, Section 68 of the Act cannot have any application. In other words, provisions of Section 132 (4a) would have over-riding effect over the provisions contained in Section 68 of the Act. Tribunal was of the view that Section 132 (4a) is merely a rule of evidence and, therefore, procedural in character. It was applicable to matters of search and seizure under Section 132 of the Act, relating to matters which were concluded before 1. 10. 1975. Being of this view, application of Section 68 of the Act was upheld. On being moved for reference as aforesaid, the two questions have been referred for opinion of this Court.

( 3 ) WE have heard learned counsel for revenue. There is no appearance on behalf of assessee in spite of notice. Learned counsel for the revenue submitted that section 132 (4a) and Section 68 operate in different fields and, therefore, the Tribunal was justified in its conclusions.

( 4 ) IN order to appreciate the stand of revenue, it would be relevant to quote sections 132 (4a) and 68 of the Act as they stood at the relevant point of time.

"section 132 (4a): Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed: (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person: (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person s handwriting, and in the case