2009 (4) TMI 308 - SC - Income Tax

Income from undisclosed sources - Search in premises of partner of assessee documents recovered indicate money received in addition to cheques money was taxed as income from undisclosed sources of one year tribunal directing AO in appeal from penalty to determine whether additional amount was received on different dates - it has been rightly held by the High Court that it is for the appellant-firm and its partners to explain and produce relevant documents before the Assessing Officer to show as to when and how the aforestated amount was received by them direction of HC is proper

Summary

Issues:
1. Failure of High Court to answer a specific question raised by the appellant.
2. Remanding of questions to the Assessing Officer for fresh consideration.
3. Taxation of unaccounted money by the Department in a previous assessment year.
4. Requirement for the appellant-firm and its partners to explain and produce relevant documents.
5. Direction by the High Court regarding the limitation issue.

Analysis:

1. The appellant raised a specific question regarding the taxation of amounts paid by purchasers to managing partners of the firm. The High Court failed to answer this question, leading to the appellant's grievance. The Supreme Court found merit in this contention and remanded the question to the Assessing Officer for fresh consideration along with another question remanded by the High Court.

2. The High Court had previously taxed the entire unaccounted money in a specific assessment year, which was deemed erroneous. The matter was remitted to the Assessing Officer to determine if a specific amount was received by the partners of the appellant-firm during the said assessment year. The High Court rightly emphasized the need for the appellant and its partners to explain and produce relevant documents regarding the receipt of the amount. Failure to provide evidence would allow the Assessing Officer to treat the amount as received during the assessment year, with no scope for raising the question of limitation.

3. The Supreme Court carefully reviewed the High Court's judgment and found no issues with the direction given regarding the limitation question. Consequently, the appellant was not permitted to raise the question of limitation before the Assessing Officer.

4. The civil appeal was disposed of accordingly, with no order as to costs, subject to the directions and considerations outlined in the judgment.