1990 (8) TMI 43 - HC - Income Tax

Summary

Issues Involved:
The judgment involves the interpretation of sections 68 and 69 of the Income-tax Act, 1961 regarding the set off of intangible additions against unexplained cash deposits and investments for the assessment year 1961-62.

Facts and Decision:
The assessee had unexplained cash credits and investments added to their income by the Income-tax Officer. The Appellate Tribunal allowed a set off of Rs. 15,000 for intangible additions made in previous years. The Commissioner challenged this set off, arguing against its justification. The High Court considered various legal precedents, including the Supreme Court's rulings on intangible additions. It was established that intangible additions are part of the real income of the assessee and can be used for expenditures. The Court concluded that the Tribunal was correct in allowing the set off based on the connection between past intangible additions and current cash deposits and investments. The question was answered in favor of the assessee.

Legal Principles:
1. Intangible additions are considered undisclosed income and are part of the assessee's real income.
2. Income from intangible additions can be utilized by the assessee.
3. Set off can be given if unexplained cash deposits relate to intangible additions made in the past.
4. The true nature of cash deficits or credits must be determined based on the specific facts of each case.

Judge's Opinion:
Justice H. K. Sema agreed with the decision, affirming that the Tribunal was justified in allowing the set off of Rs. 15,000 for intangible additions against unexplained cash deposits and investments for the assessment year 1961-62.