2009 (7) TMI 62

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....ng to raise the following substantial questions of law: i) " Whether on the basis of reasons recorded by the Assessing Officer to the effect that the assesses has purchased Fixed Deposit Receipts in a Bank during a particular assessment year, proceedings under Section 147 of the Income Tax Act can be initiated without recording a specific finding that these investments are out of income, which escaped assessment.? ii)Whether provisions of Section 69A of the Act ibid relating to unexplained money can be invoked for treating any amount, as income of a particular assessment year, when no actual money was found in possession of the assessee during that period? iii)Whether the departmental authorities can partly reject and partly accept....

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....n 9.6.95 and 14.8.95.  The explanation for the source of the funds is ostensibly the availability of cash in hand with the assessee as at the beginning of the previous year under consideration i.e.  1.4.95. According to the assessee, the said sum has been carried over from the earlier year. The AO has noted that as on 1.4.95, the assessee was only 19 years old and was not having any source of income and neither assessee has filed any income tax return for any of the prior years. The AO has further noted that assessee in the assessment proceedings for the assessment years 1998-99 to 2000-01 has admitted that prior to the impugned assessment year, he was only a student and was not gainfully employed. The AO further noted that the as....

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....ribunal accepted the explanation to the extent that the amount was in existence as on 30.3.66 though it did not accept the fact that it belonged to the wife of the assessee.  However, as a natural corollary, the Tribunal deduced that it could not have been earned in the accounting period relevant to asstt. Year 1967-68 was in this background the Hon'ble High Court opined that where explanation that the entry in assessee's accounts relates to income earned in some earlier period and not in the accounting period to which the account relates is accepted, the presumption in Section 68 of the Act does not apply and the amount cannot be taxed in the instant year. The ratio of the decision cannot be applied to the facts of the instant case....