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Issues:
1. Assessment of income from undisclosed sources for three different assessment years. 2. Taxing the income from specific properties in the hands of the assessee. Analysis: 1. The judgment addressed the assessment of income from undisclosed sources for three different assessment years, namely 1959-60, 1960-61, and 1961-62. The Income Tax Officer (ITO) noticed certain investments made by the assessee without proper explanation of sources. Consequently, specific sums were treated as income from undisclosed sources for each year. These additions were confirmed by the Appellate Assistant Commissioner (AAC) and the Tribunal. The Tribunal's decision was challenged through references to the High Court under the Income Tax Act, 1961. 2. Regarding the taxation of income from specific properties, the judgment focused on premises bearing Nos. 699, 699/1, and 1148 in Devaraja Mohalla, Mysore. The assessee claimed that the income from these properties should be treated as belonging to the Hindu Undivided Family (HUF), but this claim was rejected by the AAC and affirmed by the Tribunal without proper discussion or consideration of relevant material. The High Court held that the Tribunal erred in confirming the assessment without calling for necessary documents and material. The judgment emphasized that each assessment year is independent, and a claim rejected in one year does not preclude its consideration in subsequent years. 3. The judgment delved into the specifics of each assessment year. For the assessment year 1959-60, the assessee had made investments in various properties, and the ITO allowed a deduction from a loan amount, resulting in a net investment of Rs. 12,500. The Tribunal's decision to include the entire amount as income from undisclosed sources was deemed erroneous by the High Court. The Court reasoned that a portion of the investment should have been considered explained based on available evidence. 4. In contrast, for the assessment years 1960-61 and 1961-62, the Tribunal's decision to tax the income from investments made by the assessee was upheld by the High Court. The Court noted that the sources of the investments were not adequately explained, and the known sources of income were insufficient to justify the investments made. Therefore, the income tax authorities were justified in treating these investments as coming from undisclosed sources. 5. In conclusion, the High Court answered the specific questions raised in the references by holding that the Tribunal's decisions for the assessment years 1960-61 and 1961-62 were correct. However, for the assessment year 1959-60, the Tribunal's inclusion of the entire amount as income from undisclosed sources was deemed incorrect. The High Court directed the Tribunal to reconsider the matter in light of its observations and to decide afresh on the taxation of income from the specific properties in accordance with the law.
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