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Issues involved:
Jurisdiction and exercise of discretion by the Appellate Assistant Commissioner under section 256(1) of the Income-tax Act, 1961. Summary: The assessment in question pertained to the year 1961-62, where the assessee disclosed income as a broker without maintaining proper books of account. The Income-tax Officer estimated brokerage income based on past records. The assessee deposited Rs. 30,000 in a bank account in 1960, claiming it was saved from past earnings. However, the Income-tax Officer doubted the source of this deposit, treating it as undisclosed income. The Appellate Assistant Commissioner accepted new evidence regarding the source of Rs. 20,000 from the sale of shares, reducing the income from other sources. The Tribunal, on appeal by the revenue, overturned this decision, considering the new explanation unacceptable. The Tribunal held that the entire amount of Rs. 30,000 should be treated as undisclosed income. The questions referred to the High Court concerned the jurisdiction of the Appellate Assistant Commissioner to admit new evidence and the Tribunal's interference with the exercise of such discretion. The Court noted that the Tribunal's findings had already established the correctness of the Income-tax Officer's decision, making the referred questions of academic interest. The Court emphasized the need for proper grounds when admitting new evidence, citing precedents to support its stance. The Court rejected the revenue's argument that the Appellate Assistant Commissioner exceeded his jurisdiction by directing an inquiry into new sources, affirming the Tribunal's decision to treat the entire Rs. 30,000 as undisclosed income. In conclusion, the Court answered both questions in favor of the revenue, emphasizing the importance of valid grounds for admitting new evidence. Each party was directed to bear its own costs. Judge R. N. Pyne concurred with the decision, and the questions were answered in the affirmative.
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