Court affirms undisclosed income from investments, rejects gift claim. Previous assessments not binding.

The court upheld the Income Tax Officer's findings that the investment of Rs. 57,500 represented income from undisclosed sources for the assessment year in question. Despite the assessee's claims of the investment being from gifts and accumulated interest, the court found insufficient evidence to support this. Additionally, the court clarified that previous assessments do not preclude revenue authorities from independently examining the source of investments in subsequent years. The Tribunal's decision to treat the investment as the assessee's income was affirmed, and the assessee was directed to pay the costs of the reference.

---

---

Issues Involved:
1. Whether the investment of Rs. 57,500 was the assessee's income from undisclosed sources.
2. Whether the revenue authorities were precluded from making findings on the source of investment due to previous assessments.

Summary:

Issue 1: Investment of Rs. 57,500 as Income from Undisclosed Sources
The assessee, the wife of Sri Banshilal Jhawar, filed her return for the assessment year 1960-61, showing an income of Rs. 2,788 from interest. The ITO discovered an aggregate investment of Rs. 57,500 and questioned its sources. The assessee claimed the investments were from gifts received at her marriage and accumulated interest. The ITO found no evidence of money-lending business, no trade license, and no books of accounts. The ITO concluded that the investments represented income from undisclosed sources. The AAC, however, found that the assessee had an opening balance of Rs. 60,034 and deleted the addition made by the ITO. The Tribunal, upon appeal, upheld the ITO's findings, stating that the assessee failed to prove the sources of investment and restored the sum of Rs. 57,500 in the assessment.

Issue 2: Preclusion of Revenue Authorities from Making Findings on Source of Investment
The main question was whether the revenue authorities were precluded from making findings on the source of investment due to previous assessments. The court held that the doctrine of res judicata does not apply to income tax assessments, meaning findings in one year are not binding in another. The ITO was free to examine the source of the investment independently. The court noted that the assessee failed to produce evidence of carrying on a money-lending business and did not maintain books of accounts. The previous assessments were not conclusive for the current year, and the ITO's conclusion was based on evidence and was not perverse or unreasonable.

Conclusion:
The court answered the question in the affirmative, holding that the Tribunal was right in treating the investment of Rs. 57,500 as the assessee's income for the assessment year in question. The assessee was ordered to pay the costs of the reference.

---