1997 (1) TMI 6

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....tances of the case and on a true interpretation of Section 69 of the Income-tax Act, 1961, the Income-tax Appellate Tribunal is right in law in holding that Section 69 of the Act cannot be invoked in respect of the investments of the assessee and that therefore the addition made for the assessment year 1968-69 or as the case may be 1969-70 should be deleted ? 2. The appeals relate to the assessment years 1968-69 and 1969-70. The assessee is a muslim lady who was aged about 20 years during the previous year relevant for the assessment year 1968-69. On November 15, 1967 she had purchased 16 cents of land in Ernakulam and the amount spent by. her, inclusive of stamp and registration charges, for this purchase was Rs. 34,628/-. On November 2....

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.... not make it mandatory on his part to deal with the income/as income of the assessee as soon as the latter's explanation happened to be rejected. On that view the Tribunal allowed the appeals of the assessee and cancelled the assessment made by the Income-tax Officer. Thereafter the Tribunal at the instance of the Revenue referred the question abovementioned to the High Court for its opinion. The High Court has agreed with the said view of the Tribunal and has held that in the instant case it could not be said that the Tribunal was wrong in having differed from the Income-tax Officer and the Appellate Assistant Commissioner in the matter of exercising judicial discretion as to whether even after rejecting the explanation of the assessee....

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....on on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the Income-tax Officer is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under Section 69 has to be considered in the light of the facts of each case. In other words a discretion has been conferred on the Income-tax Officer under Section 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and....