9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1971 (5) TMI 19 - HC - Income TaxPartial partition of HUF after the relevant previous year - Whether the assessment was validly made on the assessee in the status of a Hindu undivided - Whether there was material for coming to the conclusion that Rs. 2,33,414 out of the capital of Rs. 3,33,414 credited in the books of account of the assessee represented income from undisclosed sources
Issues Involved:
1. Validity of assessment on the assessee in the status of a Hindu undivided family (HUF). 2. Material for concluding that Rs. 2,33,414 out of Rs. 3,33,414 credited in the books of account represented income from undisclosed sources. Detailed Analysis: Issue 1: Validity of Assessment on the Assessee in the Status of a Hindu Undivided Family (HUF) The court examined whether the assessment was validly made on the assessee in the status of a Hindu undivided family (HUF). The assessee, a HUF with Roshan Lal as the karta, had been carrying on business in Lahore before migrating to India post-partition and starting a jewellery shop in Delhi. The Income-tax Officer initiated assessment proceedings for the year 1948-49 and subsequent years under section 34(1)(a) of the Indian Income-tax Act, 1922, in the name of Roshan Di Hatti (proprietor Roshan Lal). The assessee claimed that the HUF ceased to exist as of March 31, 1958, due to a partial partition, but the Appellate Assistant Commissioner and the Tribunal found that the HUF continued to exist. The High Court noted that the HUF had filed returns in its own name even for the assessment year 1959-60, and in the absence of an order under section 25A(1) of the Act, assessment on the HUF was proper. The Tribunal found that the HUF had not disrupted up to the date of the assessment in May 1969. The court held that section 25A of the Act, which deals with assessment after partition, has no application where there has been only a partial partition of the joint family property. Therefore, the court answered the question in the affirmative, holding that the assessment was validly made on the assessee in the status of a HUF. Issue 2: Material for Concluding that Rs. 2,33,414 Represented Income from Undisclosed Sources The court examined whether there was material for concluding that Rs. 2,33,414 out of the capital of Rs. 3,33,414 credited in the books of account represented income from undisclosed sources. The assessee claimed that the assets entered as capital in the business account had been brought from Lahore at the time of migration. The Income-tax Officer gave the assessee credit for Rs. 20,000 for assets brought from Pakistan and treated the balance as income from undisclosed sources. The Appellate Assistant Commissioner increased the allowance to Rs. 1,00,000, and the Tribunal affirmed this finding. The Tribunal found that the assessee had failed to provide satisfactory evidence to support the claim that he had brought assets worth Rs. 3,33,414 from Pakistan. The Tribunal noted that the evidence produced was vague and based on hearsay, and the assessee had not furnished a declaration of the amount brought from Pakistan. The Tribunal gave the assessee credit for Rs. 1,00,000 and treated the balance as income from undisclosed sources. The court held that the finding of the Tribunal regarding the value of assets brought by the assessee from Lahore was based on a consideration of the circumstances and relevant material on record. The court noted that when an assessee fails to prove the source and nature of certain amounts, the Income-tax Officer is entitled to draw the inference that the amounts are of an assessable nature. The court referred to various Supreme Court decisions supporting this principle and held that there was material for the Tribunal to conclude that Rs. 2,33,414 represented income from undisclosed sources. Conclusion The High Court answered both questions in the affirmative, in favor of the revenue, and held that the assessment was validly made on the assessee in the status of a HUF and that there was material for concluding that Rs. 2,33,414 represented income from undisclosed sources. The parties were left to bear their own costs.
|
