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Issues involved:
The judgment involves the question of whether the Tribunal was justified in upholding the addition of Rs. 90,000 as income from undisclosed sources and reversing the order of the Appellate Assistant Commissioner. Details of the Judgment: The assessee, following the mercantile system of accounting, was assessed as an individual for the assessment year 1973-74 under section 143(3) on March 31, 1976. The Income-tax Officer found that the assessee had deposited Rs. 1,58,400 with the Bank of India, Calcutta, on April 5, 1972, through the assessee's son, Dayaram. The Income-tax Officer raised concerns about the feasibility of reaching Calcutta on the 5th if Dayaram had started from Tinsukia on the 4th by car. Due to inconsistencies in the explanations provided, Rs. 90,000 was treated as income from undisclosed sources. The Appellate Assistant Commissioner accepted the assessee's explanation and deleted the addition, citing the difficulties in recalling events years later. However, the Tribunal, on appeal by the Revenue, reversed the decision and upheld the Income-tax Officer's order. The assessee argued that the Tribunal failed to consider all facts and explanations, as required by legal precedents. The Tribunal's rejection of the second explanation regarding the mode of conveyance was deemed inconsistent with its previous decision in a similar case. The High Court emphasized the importance of considering all material facts and the rule of consistency in assessment proceedings. It noted that the Tribunal did not adequately address the surrounding circumstances and failed to justify the addition of Rs. 90,000 as income from undisclosed sources. In conclusion, the High Court ruled in favor of the assessee, finding that the Tribunal was not justified in affirming the addition of Rs. 90,000. The judgment highlighted the importance of consistency, consideration of all explanations, and the totality of circumstances in such cases.
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