1970 (8) TMI 28

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....0-61 on a total income of Rs. 8,682. It also appears that the assessee's wife, Smt. Chandra Kant Periwal, purported to invest Rs. 35,000 in a partnership firm styled " Rajasthan Knitting Mills " as her capital contribution for becoming a partner in that firm with a four annas share and in her individual assessment for the assessment year 1959-60 made by the Income-tax Officer, " B " Ward, 24-Parganas, the loss from the aforesaid firm was accepted subject to rectification on receipt of the share allocation report of the assessment of the firm. It also appears that for the assessment year 1960-61, another Income-tax Officer allowed registration to the firm of Rajasthan Knitting Mills. For the accounting year 1960-61, the Income-tax Officer ma....

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.... return for that year within 30 days from the date of the receipt of the notice. It was further stated in the notice that it was being issued after obtaining the necessary satisfaction of the Commissioner of Income-tax, West Bengal III, Calcutta. Dr. D. Pal, the learned counsel for the petitioner, challenges the notice under section 148 on the ground that as there was no obligation on the petitioner to disclose any income accruing or arising to his wife under section 64, it could not be said that there was any failure on his part to disclose such income for his assessment for 1960-61. He relied on the decision of the Supreme Court in the case of Muthiah Chettiar v. Commissioner of Income-tax, where it had been held that section 16(3) of ....

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....amount of Rs. 35,000 belonged to the petitioner and the petitioner invested it in the name of his wife, that is, as his benamidar, and any income arising therefrom is the income of the petitioner. There is no question of the application of section 64 in this case. During the opening of the application by Dr. Pal, I was puzzled as to why any reference was made to section 64 at all. If the department's case is that the petitioner's wife was merely a benamidar then the money actually belonged to the petitioner and the income arising therefrom was also the petitioner's income. No question of any application of section 64 would arise in such a case and the ratio of the aforesaid decision of the Supreme Court would not be attracted. Therefore, I ....