TaxTMI 
TaxTMI 
TaxTMI 
1982 (9) TMI 22
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.... prove the nature and source of some deposits and investments. After examining the evidence produced by the assessee, the ITO added a sum of Rs. 3,58,314 as income from undisclosed sources represented by the various bank deposits and investments, after including a sum of Rs. 15,000 invested in the purchase of agricultural land and Rs. 26,000 invested in the purchase of the property at Majitha Road. The ITO, in the reassessment proceedings, held the status of the, assessee is " resident but not ordinarily resident " as against the status " non-resident " assigned in the original assessment proceedings and further included a sum of Rs. 40,000 which was brought by the assessee at the time of his arrival in India from Africa in January, 1946, under the provisions of s. 4(1)(b)(iii) of the Act. The ITO also included Rs. 864 by way of interest received on the F.D. of Rs. 50,000 which was taken in the name of Sardar Narain Singh. Thus, the ITO completed the assessment on a total income of Rs. 4,17,464 by his order dated 23rd March, 1960. Feeling aggrieved from the order of the ITO, an appeal was preferred by the assessee. The AAC partly allowed the appeal and only a sum, of Rs. 1,10,860....
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....atter has come up before us for expressing our opinion on the aforesaid question. So far as question No. 1 is concerned, it may be observed that in I.T.R. No. 1 of 1976 (Dr. Surmukh Singh Uppal v. CIT, we have held that the proceedings under s. 34 of the Act were rightly initiated as the assessee had failed to disclose fully and truly the material facts at the time of the original assessment. In this view of the matter, there can be no gainsaying that the proceedings were rightly initiated under s. 34(1)(a) of the Act and are not barred by time as the same were started after four years. This brings us to question No. 2, what is required to be seen under this question is whether the Tribunal was legally right in holding Rs. 47,000 credited in the name of the assessee in the books of M/s. Hindustan Rayon & Woollen Textile Mills Ltd., and Rs. 35,860 out of deposits in the name of M/s. B. H. Singh & Co., in the Punjab National Bank, Amritsar, as income of the assessee liable to tax under the Act. The Tribunal has dealt with the item of Rs. 47,000 thus: " The next ground taken by the assessee is that the Appellate Assistant Commissioner was not justified in upholding an addition o....
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....p; Account in the name of Hindustan Rayon & Woollen Mills Ltd. Cr. Dr. Rs. 47,000 by debit to Gurdial Singh Inder Singh & Co. on 31-7-1945. Nil Account of Gurdial Singh Inder Singh & Company. Cr. Dr. Nil &....
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....After hearing the learned representatives of the parties and going through the records, we are of the opinion that the assessee is to succeed partly on this point. We find from the records that Shri Bhupal Singh, the elder son of the assessee came to India in February, 1945, and at that time he brought a sum of Rs. 28,000. A certificate from M/s. Building and Trading Co. Ltd. Eldorate, Africa, was also produced before the Appellate Assistant Commissioner which indicated that Shri Bhupal Singh, son of the assessee, was paid dollars 50,000 equivalent to about Rs. 28,000 on 25-2-45. The assessee claimed that the above sum of Rs. 28,000 was deposited by Shri Bhupal Singh in the account of M/s. B. H. Singh & Co. in December, 1945, and was included in the sum of Rs. 60,000. A sum of Rs. 36,000 was withdrawn by Shri Bhupal Singh in January, 1946, and was utilised by him towards the purchase of property at Majitha Road. In the absence of any material on record to show that the sum of Rs. 28,000 brought by Shri Bhupal Singh was either spent away or invested by him elsewhere during February, 1945, to December, 1945, we are of the opinion that the assessee has been able to explain the source ....
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.... about twenty days after the rejection of the said application. In our opinion, the Income-tax Officer should have allowed the assessee requisite opportunity to produce the relevant evidence as requested for, particularly when the assessment order was passed about twenty days after the rejection of the assessee's request. Thus, by refusing to accept the assessee's request, natural justice was denied to him and the Income-tax Officer had made huge additions towards the total income of the assessee without controverting the affidavit filed by Sardar Narain Singh and without summoning Sardar Narain Singh or the various books of accounts as requested for by the assessee in his application dated 3-3-1960. Accordingly, we upheld the deletion of a sum of Rs. 2,15,099 out of the total deletion of Rs. 2,55,097 made by the Appellate Assistant Commissioner in respect of the 11 items which are the subject-matter of appeal by the Department." A bare perusal of the aforesaid observations would show that the Tribunal has given necessary relief by upholding the deletion of a sum of Rs. 2,15,099 as the assessee's request for allowing him opportunity to produce the relevant evidence was declined. ....