1980 (8) TMI 73

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....tice to the respondents, is disposed of by the following order: The petitioner, for the first time, filed his income-tax return for the assessment year 1975-76. His return disclosed income from business at Rs. 6,100. The ITO estimated his income at Rs. 7,000. The petitioner-assessee also showed a capital investment of Rs. 20,000 in the name of his minor sons in a firm, M/s. Santosh Bombay-Dyein....

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....etitioner, the said sum of Rs. 15,000 was brought to tax as income from unexplained source for the relevant assessment year 1975-76. Aggrieved by the assessment order, the petitioner preferred a revision under s. 264 of the I.T. Act to the Commissioner of Income-tax, Karnataka, respondent No. 1 herein. The Commissioner disposed of the revision petition rejecting the same, observing-as follows: ....

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.... utilise the banks at Devangere in the intervening period of two years as it was open to the petitioner to use or not to use the bank facilities. It is, therefore, contended that the Commissioner did not judicially exercise the discretion vested in him under s. 264 of the I.T. Act but proceeded to pass, the order on a capricious surmise as to what a person should or should not do with the money he....

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.... same. The ITO had only two choices before him. One was to reject the explanation as not believable for the reason that on his investigation no such pigmy deposit was ever made in the bank. In the alternative he ought to have called upon the assessee-petitioner to substantiate his claim by documentary evidence. Having exercised neither of the choices, it was not open to the ITO to merely surmise t....