TaxTMI 
TaxTMI 
1984 (2) TMI 41
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....the Delhi High Court in the case of Rattan Lal v. Income-tax Officer [1975] 98 ITR 681 ? (2) Whether the Tribunal was correct in holding that the aforesaid amount cannot be brought to tax in the assessment year 1967-68 in spite of the provisions of s. 68 of the Income-tax Act ? " The answer to the first question has to be in favour of the Department because of the judgment of the Supreme Court in Jamnaprasad Kanhaiyalal v. CIT [1981] 130 ITR 244, wherein the judgment of the Delhi High Court reported as Rattan Lal v. ITO [1975] 98 ITR 681 was overruled. The second question presents some problem. In this case, the disclosure by the wife under the Voluntary Disclosure Scheme under the Finance (No. 2) Act of 1965 was made on March 30, ....
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....erned, it has been explained as having come out of the amounts which were in existence in the previous accounting year. The amount of the credit cannot, therefore, be treated as the income of the accounting year 1966-67, when it is clear that the money was in existence even in the financial year 1965-66." The quoted portion shows that the Tribunal took it as satisfactory explanation that the amount appearing in cash credit was not earned during the financial year relating to the assessment year 1967-68. If this is so, s. 68 was not attracted. Obviously, the amount had to be taxed in the assessment year 1966-67. The terminology of s. 68 is such that if cash credit entries in the accounts are not satisfactorily explained, they would be ....
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....mount in the assessment year 1966-67. When the matter came in appeal to the Tribunal, they recorded their conclusion as quoted above. In other words, they accepted the fact that the amount was in existence in March, 1966, and, therefore, could not be taxed in the assessment year 1967-68. The question referred to us concerning the impact of s. 68 seems to be on the basis that the amount must be taxed under that section in the year in which the entry appears in the account books. We do not think that this follows as a necessary corollary to the conclusion on facts. The amount may be taxed in the assessment year in question, when the explanation is not found to be satisfactory but if the explanation is found to be satisfactory to the extent....
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....d counsel for the Department also urged that he did not really challenge this point of view but he submitted that the Tribunal had wrongly accepted the explanation to the extent of holding that the amount was in existence in March, 1966. We think this is a finding of fact. The Tribunal could have rejected the explanation, but in order to make it taxable in the hands of the assessee, there had to be a finding that the amount was benami and did not belong to the wife. The wife's point of view was that this was the same amount which was disclosed under the Voluntary Disclosure Scheme on March 30, 1966. When this explanation was rejected on the footing that the wife had never any source of income, an inference of fact was drawn that this was th....