Full and true disclosure of cash credits required for reassessment; mere production of books was not enough.

Mere production of account books did not amount to full and true disclosure of cash-credit entries unless the assessee specifically drew the Income-tax Officer's attention to them and disclosed their nature and amount. On that basis, the condition for reassessment under section 34(1)(a) of the Income-tax Act, 1922 was satisfied. The reassessment was also held to be within limitation, as the assessment was completed within eight years from the end of the relevant assessment year and, in any event, the matter fell within section 28(1)(c) read with section 34(2), which also permitted completion within eight years.

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Issues: Whether reassessment under section 34(1)(a) of the Income-tax Act, 1922 was valid in the absence of full and true disclosure of material facts, and whether the reassessment was within limitation.

Analysis: The assessee's account books contained the cash-credit entries, but mere production of books did not amount to disclosure of the information contained in those entries to the Income-tax Officer unless attention was specifically drawn to them. The assessee was required to disclose the nature and amount of the cash credits and leave it to the Income-tax Officer to determine their taxability. On that finding, the condition for invoking section 34(1)(a) was satisfied. The assessment was also completed within eight years from the end of the relevant assessment year, and in any event the case was covered by section 28(1)(c) read with section 34(2), which also permitted completion within eight years.

Conclusion: Reassessment under section 34(1)(a) was valid, and the assessment was within time.

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