ITO, while framing assessment of assessee, Shri Om Prakash Pandey, individual, for asst. yr. 1977-78 added Rs. 18,000 to his income on account of unexplained credits. AAC on appeal by assessee, deleted addition of Rs. 10,000 and further set aside addition of Rs. 8,000 and referred to case to ITO for further enquiry in that connection. Aggrieved by said order, department has come up in appeal with ground that AAC should have sustained said addition. assessee has filed cross objection in respect of same and, therefore, cross-objection shall be considered along with appeal. other grounds raised in cross- objection namely ground Nos. 3 & 4 have not been pressed by assessee and as such, cross-objection survives only to extent of appeal by department regarding said Rs. 18,000. relevant facts are these. assessee had maintained three sets of accounts. In Tendu leaves set of account also would of Patti set, Rs. 18,000 and Rs. 10,000 were credited in capital account on 12th May, 1976 and 22nd Nov., 1976. assessee was called upon to explain source of receipt of said amount. Out of Rs. 18,000 credited on 12th May, 1976, assessee, according to ITO, furnished satisfactory explanation of Rs. 10,000 having transferred from another set of accounts. However, in respect of balance of Rs. 8,000, his explanation was that he had taken loan from one Shri Krishna Kumar Tewari, who was agriculturist. In support of confirmatory letter was also filed from Shri Krishna Kumar Tewari. However, according to ITO, assessee did not produce Shri Krishna Kumar Tewari for examination and verification of genuineness of alleged advance. Further, as to credit of Rs. 10,000, on 22nd Nov., 1976, explanation of assessee was that same was taken by him from his Munim. None of two credits were believed as genuine by ITO. ITO observed that not only that both items of Rs. 8,000 and Rs. 10,000 were credited in capital account of assessee himself and were as such, not reflected as liability in balance sheet but even in WT return they were not shown as liabilities. Thus, according to him, explanation of assessee that he had received said amount from Shri Krishna Kumar Tewari and his Munim was after thought. ITO, therefore, took said Rs. 18,000 as unexplained cash credit. On appeal, AAC accepted explanation that Rs. 10,000 were given by Munim to assessee. Shri Krishna Kumar Tewari was also produced before AAC. AAC examined him and referred that matter to ITO for further. enquiry. It is argued by ld. departmental representative that explanation of assessee was obviously afterthought, inasmuch as neither names of Krishna Kumar Tewari and Munim appeared as creditors in account books and balance-sheet of assessee nor said Rs. 18,000 was ever shown s liability. Further in wealth-tax return, of that year, assessee did not show said amount as debt. ld. counsel of assessee, on other hand, contended that wealth-tax return was revised on 19th Feb., 1980 and debt was shown in subsequent asst. yrs. 1979-80 and 1980-81. According to him, Krishna Kumar Tewari was present before ITO but as not examined by ITO. After having given our anxious consideration to rival contentions of parties, we find that there is much substance in appeal. Munim of assessee was already examined by ITO. He could not furnish satisfactory explanation as to why Rs. 10,000 if at all were given by him to assessee were not credited by him in assessee were not credited by him in account books of assessee in his own name. His explanation that since it was deposits it was not credited in his name is not acceptable. It appears that names of Shri Krishna Kumar Tewari and Munim came to light for first time when capital account of assessee was scrutinised and he was put to explanation as to source of Rs. 18,000. Further, it is significant to note that said amount of Rs. 18,000 was never shown as liability either in balance sheet or in wealth- tax return by assessee. assessee when was asked by ITO to prove source of credit on those of Rs. 18,000, he for first time furnished explanation on 19th Feb., 1980 and only on that date he furnished revised return of wealth-tax for asst. yr. 1977-78 when, as observed by ITO, wealth-tax assessment was already finalised much earlier. argument of ld. counsel for assessee that claim in wealth- tax return was not allowed pertains to asst. yrs. 1979-80 and 1980-81, which is not at all relevant. AAC observed in his order that assessee had produced Shri Krishna Kumar Tewari before him. Shri Krishna Kumar Tewari, appeared to him man of means having capacity to advance loan of Rs. 8,000. But ld. AAC lost sight of requirement of law that for establishing cash credit not only identity and credit-worthiness of creditor should be established but genuineness of transaction should also be established. creditor may be man of means but transaction itself may not be genuine. ITO rightly stated in assessment order that he wanted Shri Krishna Kumar Tewari for verification of genuineness of alleged advance. advance under circumstances, could not be genuine, when neither name of Shri Krishna Kumar Tewari was disclosed in account books of assessee nor was shown as debt in balance-sheet and in WT return. In view of our discussion, of AAC is set aside and instead that ITO is maintained. In result, appeal is allowed and cross-objection is dismissed. *** INCOME TAX OFFICER v. OM PRAKASH PANDEY