From Sahih Muslim (Hadith 2517):
Abu Huraira (Allah be pleased with him) narrated that the Messenger of Allah (may peace he upon him) made a mention of the new moon and (in this connection) said:Observe fast when you see it (the new moon) and break fast when you see it (the new moon of Shawwal), but when (the actual position of the month is) concealed from you (on account of cloudy sky), then count thirty days
Reference: Muslim 2517