1958 (8) TMI 52

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....spondents : K. N. Rajgopal Shastri and D. K. Kapur JUDGMENT Bishan Narain, J. This is an application under section 66(2) of the Income- tax Act asking us to direct the Income-tax Appellate Tribunal to state the case raising questions of law and to refer the same to this court for decision. The petitioners are a partnership firm and are carrying on business as contractors for the constr....

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....1952 the Income-tax Officer initiated proceedings under section 34 of the Income-tax Act and reopened the assessment of 1943-44 assessment year. The Income-tax Officer added a further sum of Rs. 1,52,750 as profits obtained by selling in black-market part of the iron and cement received from Government. On appeal the Income-tax Tribunal held that section 34(1)(a) applied to the case, but the quant....

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....on of the Income-tax Officer. The expression suggests reasonable grounds on which the Income-tax Officer may take action. Power under this section cannot be exercised on mere rumours or suspicions. It is argued on behalf of the firm that there is no material on the record on which the Income-tax Officer could be said to have had reason to believe that certain profits had escaped assessment. This i....