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Issues: Determination of undisclosed income, evaluation of evidence, relevance of findings by the Tribunal.
Analysis: The case involved assessing the undisclosed income of an individual for the assessment year 1962-63. The Income-tax Officer initially added Rs. 93,000 as income from undisclosed sources. This addition was upheld by the Appellate Assistant Commissioner. However, in a further appeal, the Tribunal reduced the undisclosed income to Rs. 42,000. The reduction was based on the explanation provided by the assessee regarding the source of the sum of Rs. 78,000, which included amounts credited by a registered firm and a repayment to another individual. Regarding the source of Rs. 78,000, the assessee claimed that it was borrowed from his wife, who testified to giving him money at different times. The Tribunal considered the wife's statement, the probabilities of savings from household expenses, and other income sources like commissions. The Tribunal found that the assessee had explained the source of Rs. 51,000 out of the Rs. 78,000, leading to the reduction in undisclosed income. The Tribunal's decision was challenged on the grounds of lack of evidence to support the reduction in undisclosed income. The Revenue argued that there was insufficient proof that the wife could have saved the claimed amounts. However, the court held that the Tribunal's decision was based on a thorough evaluation of the evidence and probabilities, rejecting the Revenue's contention of lack of evidence. The court affirmed that the Tribunal's findings were not based on irrelevant material or misreading of evidence. In conclusion, the court answered the first question in favor of the assessee, confirming the Tribunal's reduction of undisclosed income. The second question was answered against the Revenue, supporting the Tribunal's decision. The reference was answered accordingly, with no order as to costs.
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