TaxTMI 
TaxTMI 
1979 (1) TMI 2
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....e-tax for the assessment year 1959-60 and certain interest paid by the respondent to creditors from whom it claimed to have borrowed monies on hundis, was allowed as deductible expenditure. The assessment of the respondent was completed on 23rd August, 1960. On or about 25th January, 1968, however, a notice was issued by the ITO under s. 148 of the I.T. Act, 1961, to reopen the assessment of the respondent for the assessment year 1959-60. The notice was obviously under s. 147(a) since a period of four years had already elapsed from the close of the assessment year 1959-60 and no notice could be issued under s. 147(b). The ITO claimed that the transactions of loan represented by the hundis were bogus and no interest was paid by the responden....
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....nd true disclosure. The ITO realising this position filed a further affidavit on 27th January, 1970, stating as follows : " In January, 1968, I was the Income-tax Officer, 'I' Ward, Hundi Circle, Calcutta. On or about the 25th January, 1968, I issued a notice under section 148 of the Income-tax Act, 1961, on the petitioner. My reasons for issuing such notice were these. In the course of assessment of the petitioner for assessment year 1963-64, it was discovered that various items shown as loans against the security of hundis in the petitioner's books of account for the previous year relevant to assessment year 1959-60 were in fact fictitious. Credits against the names of certain persons as having advanced loans, viz., Amarlal Moolchand, ....
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....rt. The present case is clearly covered by the decision of this court in CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 (SC). There the assessee in the course of its original assessment to income-tax for the assessment year 1949-50 had produced a partnership agreement with one Ratiram Tansukhrai and claimed that the profits earned by it from H. Manory Ltd. had been divided between itself and Ratiram Tansukhrai under the partnership agreement and its one-half share of the profit, namely, Rs. 87,937, was the only amount assessable to tax in respect of this source. The ITO accepted the partnership agreement and assessed the assessee only on the profit of Rs. 87,937. It appears that while making assessment for the assessment year 1950-51 the I....
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....TO was not justified in seeking to reopen the assessment under s.34(1)(a) of the I.T. Act. The revenue applied to the Tribunal for a reference but the application was rejected and the High Court also dismissed the application of the revenue for calling for a reference from the Tribunal. The revenue thereupon preferred an appeal to this court by special leave. The appeal was rejected by this court on the ground that the assessee had disclosed all its books of account and evidence from which material facts could be discovered and it was under no obligation to inform the ITO about the possible inferences which might be raised against him and, hence, there was no failure on its part to disclose the preliminary facts relevant to the assessment w....