TaxTMI 
TaxTMI 
1990 (8) TMI 43
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....ff of Rs. 15,000 on account of intangible additions made in the earlier years against unexplained cash deposit and investment treated as the assessee's income from other sources relating to the assessment year 1961-62 ?" The facts relevant for the purpose of deciding the aforesaid question of law may be briefly stated thus : The assessee is an individual. The relevant assessment year is the assessment year 1961-62. The assessment of the assessee for the aforesaid year was reopened by the Income-tax Officer under section 147(a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). In the course of the reassessment proceedings the Incometax Officer, A-Ward, Tripura Circle, Agartala, found that the assessee had introduced cash....
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....t. The Tribunal held that in the context and setting of the relevant facts, the assessee has to be given some credit for the intangible additions made in the past. It came to the conclusion that the assessee should be given credit for a sum of Rs. 15,000 on that account. Accordingly, a set-off was given for Rs. 15,000 against the additions made of Rs. 28,600 by the Income-tax Officer on account of undisclosed deposit and investment. By setting off this amount, the Tribunal reduced the addition made by the Income-tax Officer to Rs. 13,600. The Commissioner of Income-tax applied for a reference and, at his instance, the Tribunal has referred the aforesaid question of law for our opinion. Mr. S. Deb, learned counsel for the Commissioner, su....
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....ns of the Act, the Revenue Authority has to act in a fair and consistent manner. Having assessed the company on a large sum as its undisclosed income, it cannot in the same breath, say that these profits did not in fact exist because they did not appear from the company's books and could not therefore have been available for the payment of dividends. Among common men, such an attitude would be regarded as blowing hot and cold or playing fast and loose." This interpretation was followed by the Madras High Court in S. Kuppuswami Mudaliar v. CIT [1964] 51 ITR 757. It was observed (at page 762 of the report) : "Additions are no doubt made very often on estimate basis. But it can never be said, or at any rate the Department cannot contend,....
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....particular facts and circumstances of the case." There are also a member of other decisions of different High Courts where it has been held that cash credits or investments made in a particular accounting year may, in proper cases, be explained with reference to intangible additions made in the past or in the same year. However, in view of the aforesaid decisions of the Supreme Court, we do not think it necessary to cite or discuss the same. The principles that emerge from the decisions can be summarised as follows : v (1) Amounts represented by 'intangible additions' to the book profits of an assessee during an assessment proceeding constitute undisclosed income of the assessee and are as much a part of his real income as those di....