1979 (5) TMI 79 - AT - Income Tax

Summary

Issues:
1. Addition of income under "other sources" by the ITO in the assessments of the assessees.
2. Deletion of additions by the AAC for certain assessment years.
3. Confirmation of additions by a different AAC for a specific assessment year.
4. Acceptance of explanation regarding remittances made from Ceylon through unofficial channels.

Detailed Analysis:
1. The ITO added sums to the assessees' income under "other sources" for various assessment years, rejecting the assessees' claim of remittance from Ceylon. The AAC deleted these additions for some years, while a different AAC confirmed them for one assessment year. The issue revolved around the justification of these additions to the assessees' income.

2. The AAC's order for the assessment years 1973-74 and 1974-75 highlighted undisputed facts regarding the assessees' business activities in Ceylon and India. The AAC found that the assessees had substantial resources in Ceylon, which were duly considered in income-tax and wealth-tax assessments. The AAC also referred to a Circular of the Central Board of Direct Taxes regarding remittances through unofficial channels, supporting the assessees' explanation.

3. The judgment considered the explanation provided by the assessees regarding remittances from Ceylon through unofficial channels. The AAC found the explanation to be possible, probable, and satisfactory, contrary to the Revenue's contention. The judgment distinguished a previous case where different facts led to a different outcome, supporting the acceptance of the assessees' explanation in the present case.

4. Ultimately, the tribunal upheld the AAC's orders for the assessment years 1973-74 and 1974-75, deleting the additions made by the ITO. However, for the assessment year 1975-76, the tribunal found the assessees' explanation regarding remittances through unofficial channels acceptable and deleted the additions made by the ITO. Consequently, the appeals of the assessees were allowed, and those of the Revenue were dismissed, resolving the issue of income additions under "other sources" for the respective assessment years.