O.P. JAIN, J.M. This appeal by assessee relates to asst. yr. 1975-76. assessee is limited concern. books of account of assessee showed certain deposits made by Shri Lalit Ram Tewari, Hari Lal Paswan and Babulal. assessee was required by Assessing Officer to produce said persons for verifying genuineness of deposits. Shri Lalit Ram was produced before Assessing Officer and his statement was recorded. remaining two creditors could not be produced by assessee. On consideration of statement of Shri Lalit Ram Tewari, Assessing Officer came to conclusion that he did not hold sufficient status to advance sum of Rs. 8,000 to Rs. 9,000 to assessee. He also found that peak deposit in account of Shri Lalit Ram Tewari was to tune of Rs. 2,377. As such same amount was added as assessee's income from undisclosed sources. Since assessee had failed to produce remaining two depositors and no confirmation about deposits was filed in respect of deposits made by them Assessing Officer added sum of Rs. 6,000 as amount said to have been deposited by Hari Lal and sum of Rs. 6,200 said to have been deposited by Babulal. Aggrieved by said additions, assessee went up in appeal before CIT (A) but remained unsuccessful. As such, assessee has come up in appeal before us. ld. authorised representative for assessee has contended that assessee is wholesale dealer of Kerosene oil and depositors were sub- dealers of assessee and used to receive deposits from its sub-dealers as and when money was needed by it It has also been submitted that depositors are genuine and their identity is not in doubt. It was further submitted that depositors had capacity to advance amounts in question. On other hand, ld. departmental representative has supported orders of authorities below. He has pointed out that two depositors namely Shri H.L. Paswan and Babulal could not be produced by assessee before Assessing Officer for verification. He has also submitted that no confirmation on their behalf was produced. He has also pointed out that two depositors namely Shri H.L. Paswan and Babulal could not be produced by assessee before Assessing Officer for verification. He has also submitted that no confirmation on their behalf was produced. He has also pointed out that in earlier year also, assessee had shown deposit from Babulal which was not accepted and order of IT authorities was confirmed by Tribunal. It was also argued on behalf of Revenue that production of mere confirmatory letter is not sufficient and assessee has to establish genuineness of deposit and capacity of depositor to advance amount. We have considered rival contentions. As regards amount deposited by Shri Lalit Ram Tewari is concerned, we find that he was holding licence to sell kerosene. copy of his licence has been filed by assessee and same is paper No. 7 of assessee's paper book. It goes to suggest that licence was initially issued to Shri Tewari for year 1973 and it was subsequently renewed from time to time. Paper No. 5 of assessee's paper book is copy of Shri Tewari's account maintained by assessee. It shows number of transactions. Paper No. 6 is copy of depicting purchases made by Shri Tewari from assessee's establishment. These documents go to suggest that there had been regular transactions between assessee and Shri Tewari. Besides this, Shri Tewari was examined by Assessing Officer and he had confirmed deposits. He had further stated that he used to purchase kerosene oil from assessee-firm. He also holds 12 acres of agricultural land and was also earning Rs. 200 per month by employment. Thus identity of Shri Tewari cannot be doubted. His statement makes us believe that he had capacity to advance amount in question. In circumstances, we are inclined to accept assessee's version so far as it relates to deposit made by Shri Tewari. Thus, we hereby delete addition to extent of Rs. 2,377. As regards sum of Rs. 6,000 paid to have been deposited by Shri Hari Lal Paswan is concerned, it has been submitted before us that Shri Paswan had issued confirmatory letter in respect of deposit and same was produced before authorities below. Shri D.B. Bhargava appearing for assessee has also contended that Shri Hari Lal Paswan was also retail dealer of kerosene oil n d he had been issued licence by authorities. Paper No. 10 of assessee's paper book is copy of licence issued to Shri Hari Lal Paswan by District Supply Officer, Gorakhpur. fact that licence was issued to Shri Hari Lal makes us to believe that there was man by that name but simply o n account of that licence it cannot be believed that he had advanced amount in question to assessee. burden lies on assessee to prove that Shri Hari Lal had deposited said amount with it, but assessee could not produce Shri Hari Lal before Assessing Officer although assessee w s required to produce him. authorities below have observed that no confirmation was filed from Shri Hari Lal. Copy of alleged confirmation has also not been produced before us. In circumstances, it cannot be held that deposit by Shri Hari Lal has been established. Even if letter of confirmation had been filed that would be of little assistance to assessee, because capacity of Shri Hari Lal to advance amount has not been proved. We, therefore, uphold order of CIT(A) on point. As regards deposit by Shri B. Lal is concerned, we find that said depositor was not produced nor any letter of confirmation from him was filed. That apart, it is undisputed that during asst. yr. 1974-75 as well, assessee had shown some deposits by Shri B. Lal. Such deposit was held to be ingenuine and was added to assessee's income and addition was upheld i n appeal by Tribunal. This is circumstance to suggest that deposit reflected in assessee's account books during year under consideration is also not genuine. We, therefore, find no force in appeal on point and we hereby approve of order of authorities below. In result, appeal stands allowed in part. *** HIMALAYAN MAGNESITE LTD. v. INCOME TAX OFFICER