Unaccepted disclosure scheme claims can justify treatment of amounts as undisclosed income and sustain tax additions.

Where an assessee's disclosure under a disclosure scheme is not accepted, the disputed amount may be treated as income from undisclosed sources. On that basis, the addition of Rs. 38,500 for the assessment year 1969-70 was examined and found legally sustainable, with the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal all taking the same view. The addition to taxable income was therefore sustained as valid.

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Issues: Whether the addition of Rs. 38,500 sustained in the assessment year 1969-70 was legal and valid when the assessee's disclosure under the disclosure scheme had not been accepted.

Analysis: The disclosure made by the assessee was not accepted. On that basis, the amount of Rs. 38,500 had to be treated as income from undisclosed sources. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal had all taken the same view and upheld the addition to the taxable income.

Conclusion: The addition of Rs. 38,500 was held to be legal and valid and was sustained.

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