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TMI Blog1956 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the ledge of jewellery and also on promissory notes. The assessment which is the subject matter of this reference was for 1951-52 on the income, profits and gains accrued during the accounting period which ended on 6th April, 1951. The assessee declared the net interest receipts at ₹ 19,922 and a total income of ₹ 17,214. It is stated that as a result of the Income-tax Inspector's inquiry, tree receipts one dated 29th May, 1950, by K. Jogi Naidu for ₹ 725, the second, dated 18th June, 1950, by N. Ganganna's son Kondanna or ₹ 650 and the third dated 24th October, 1950, by P. Apparao for ₹ 400 were discovered. From these receipts it appears loans were given on interest ranging from 0-12-0 to 1-4-0 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... daughter. The appellate Assistant Commissioner found that the total advances by the assessee Were ₹ 9.29 lakhs, the credit balance in the appellant's capital account being ₹ 1.74 lakhs. The major portion of the money required for the advances was obtained from the Imperial Bank and the Andhra Bank. From the former ₹ 3,58,479 was borrowed at an interest of 5 per cent. and from the letter a sum of ₹ 2,76,355 was borrowed at an interest of 6 per cent. In the result he held the estimate made by the Income-tax Officer was justified. On appeal, the Income-tax Tribunal also confirmed this assessment as the books did not disclose the true state of affairs and were correctly rejected and as the estimate of income made, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee May produce and such other evidence as the Income-tax Officer May require on specified points shall be an order in writing assess the total income of the assessee on the basis of such assessment. In making such assessment it is fair and equitable to conclude that the assessee will be given an opportunity of showing, if he can, that the material of the basis upon which the Income-tax Officer proposes to assess his income is incorrect. This view has been taken not only by this High Court, but also by several High Courts in India and by the Privy Council and the Supreme Court. In Maharaja of Dharbhanga's case [1933] 1 I.T.R. 94, in appeal from the same case reported in I.L.R. 9 Patna 240, their Lordships agreed with the Patna Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, natural justice demands that he should draw the assessee's attention to it and give him an opportunity to produce evidence in rebuttal. It May be noted that the Income-tax Officers in the discharge of their duties under the Act receive a good deal of information which is not at all evidence according to the accepted notions of law. Consequently it is only fair and just that the accuracy or otherwise of such information will here to be ascertained and the only was of doing so is to give an opportunity to the assessee who can urge his plea as to whether the Income-tax Officer in misinformed. At any rate, after giving this opportunity the Income-tax Office will always be in a better position to know as to what extent that information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timated. Finally their Lordships of the Supreme Court in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal [1954] 26 I.T.R. 776, put their seal of authority on this proposition when they observed at page 782: ".....We are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which May not be accepted as evidence in a Court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of section 23 of the Act, the Income- tax Officer is not entitled to make a pure guess and make an assessment without reference to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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