TaxTMI 
TaxTMI 
2012 (3) TMI 57
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....ised his power u/s 263 of the Income-tax Act. Referring to the judgment of the Punjab & Haryana High Court in Commissioner of Income-tax vs Sohana Woollen Mills 296 ITR 238 (P&H), the ld.representative submitted that a mere audit objection and the fact that a different view can be taken should not be enough to say that the order of the assessing officer was erroneous and prejudicial to the interest of the revenue. Referring to the judgment of the Apex Court in Lakmichand Baijnath vs Commissioner of Income-tax 35 ITR 416 (SC) and the judgment of the Calcutta High Court in Daulatram Rawatmull Vs Commissioner of Income-tax 64 ITR 593(Cal) and Mansfield & Sons vs Commissioner of Income-tax 48 ITR 254 (Cal) and the judgment of Kerala High Court ....
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....er is erroneous and prejudicial to the interest of the revenue. Referring to the order of the Administrative commissioner, the ld.representative submitted that the Commissioner only remanded back the matter to the file of the assessing officer for reconsideration in the light of the judgment of the Gujarat High Court in the case of Fakir Mohammed Haji Hassan v Commissioner of Income-tax 247 ITR 290 (Guj). Therefore, according to the ld.DR, the assessee can very well explain the matter before the assessing officer under which head the income was to be assessed. 4. We have considered the rival submissions on either side and also perused the material available on record. Admittedly there was addition u/s 68 of the Income-tax Act. The assess....
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.... be exercised if the Commissioner of Income-tax was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the Commissioner of Income-tax for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation." 5. Whereas, in the case under consideration, the assessing officer in the course of assessment proceedings, found that the assessee could not explain the funds raised out of the shares and debentures. Therefore, an addition of Rs.2,13,50,000 was made u/s 68 of the Income-tax Act and the assessing officer treated the same as business income. However, the Administrative Co....
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....d source of investment or acquisition of the gold value of such gold was deemed to be the income of the assessee and there was no question of treating the value as a deductible trading loss on its confiscation because such income did not fall under the head "Income from profit & gains of business or profession". In fact, the Gujarat High Court has observed as follows at page 294 of the ITR: " It is, therefore, clear that, when the investment in or acquisition of gold, which was recovered from the assessee was not recorded in the books of account and the assessee offered no explanation about the nature and source of such investment or acquisition and the value of such gold was not recorded in the books of account, nor the nature and sourc....
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.... of satisfactory explanation regarding the source of the creditor in the shares and debentures, can we say that the credit is not a business income. Admittedly, the assessee is a registered company. It has no other source of income. It is not the case of the revenue that the directors or other shareholders invested their personal funds. If that is so, there cannot be any addition in the case of the present assessee. The very fact that the addition was made in the hands of the present assessee shows that the assessee has generated unaccounted income in the course of its business activity. The revenue has not found any other material or investment as in the case before the Gujarat High Court. In the case before the Gujarat High court, the inv....
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....gly, the finding of the Tribunal was confirmed by the Apex court. the Apex court summarized its findings on page 424 of the ITR as follows: " The position may thus be summed up : In the business accounts of the appellant we find certain sums credited. The explanation given by the appellant as to how the amounts came to be received is rejected by all the Income-tax authorities as untenable. The credits are accordingly treated as business receipts which are chargeable to tax. In Govindarajulu Mudaliar v. Commissioner of Income-tax, this court observed: "There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the In....