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Issues:
Assessment of a sum of Rs. 1,00,000 in the assessment year 1955-56 and the reasonableness of the Appellate Tribunal's decision in this regard. Analysis: The judgment of the court pertains to the assessment of a sum of Rs. 1,00,000 in the assessment year 1955-56. The Income-tax Officer observed that the assessee had deposited two sums of Rs. 50,000 each in June 1954, which were later withdrawn and advanced to another individual. The assessee failed to provide evidence for these transactions and did not maintain proper books of account. The Income-tax Officer assessed the total income to be Rs. 1,02,772. The Appellate Assistant Commissioner dismissed the appeal, noting the lack of maintained accounts by the assessee. The Tribunal, however, held that the amount of Rs. 1,00,000 should have been assessed in the previous year and deleted the addition for the assessment year 1955-56. The court was tasked with determining the correctness of the Tribunal's decision. The Revenue contended that the Tribunal erred in not assessing the amount in the hands of the assessee for the assessment year 1955-56, as the assessee failed to prove possession of the cash in the previous years. Case laws were cited to support this argument. On the other hand, the assessee argued that as per section 147(a) of the Act, the amount should have been assessed in the previous year and could not be taxed in the current year. Legal precedents were cited to justify the Tribunal's decision based on the evidence presented. The court noted that the assessee could not substantiate the claim of possessing a large amount of cash in the relevant years. The Tribunal's findings indicated a lack of evidence supporting the possession of cash in the previous years. The court emphasized that the investment of Rs. 1,00,000 surfaced only in the assessment year 1955-56, justifying its inclusion in the current year's assessment. The court disagreed with the Tribunal's reasoning and held that the sum of Rs. 1,00,000 should be assessable in the hands of the assessee for the assessment year 1955-56. Regarding the reasonableness of the Tribunal's decision, the court found that the reliance on the balance-sheet and the lack of material supporting the possession of large funds by the assessee rendered the Tribunal's decision unreasonable. The court concluded that as the funds were invested only in the current assessment year, steps to include the amount as undisclosed income were justified. The court held in favor of the Revenue, stating that the Tribunal's decision was not reasonable based on the facts and circumstances of the case. The Revenue was awarded costs for the reference.
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