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Issues: Assessment of income belonging to the assessee's wife, justification of adding sum of Rs. 29,000 to the assessee's income, assessment of interest income in the hands of the assessee for multiple assessment years.
In this case, the assessee, an individual, derived share income from two registered firms and had interest income for the assessment years 1963-64 to 1965-66. The issue revolved around the sum of Rs. 29,000 claimed to be invested by the assessee's wife in a money-lending business. The Income Tax Officer (ITO) found no tangible proof that the amount belonged to the wife, concluding it to be the assessee's secreted profit. Consequently, the sum of Rs. 29,000 was added to the assessee's income, along with interest thereon, for all three assessment years. Upon appeal to the Appellate Assistant Commissioner (AAC), new material was presented, including receipts and certificates, indicating deposits made by the wife. However, the AAC rejected this evidence, noting that the alleged deposits were with relatives of the wife and that it was implausible for an illiterate lady to save Rs. 29,000 without investing it. The AAC upheld the ITO's decision. Subsequently, the matter reached the Tribunal, which re-evaluated the circumstances. The Tribunal observed that the wife had no verifiable source of income, casting doubt on the legitimacy of the claimed deposits and business activities. The Tribunal concluded that the amount in question rightfully belonged to the assessee and dismissed the appeal. The High Court affirmed the Tribunal's decision, emphasizing that the material considered by the Tribunal clearly indicated that the Rs. 29,000 did not belong to the assessee's wife but to the assessee himself. The Court held that the circumstances analyzed by the Tribunal were substantial in justifying the assessment of the amount as the assessee's income. Consequently, both questions raised by the assessee were answered in the affirmative and against the assessee, leading to a directive for the assessee to bear the costs of the reference.
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