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TMI Blog1974 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer found that there were certain discrepancies regarding the stock of manganese held by the petitioner during the relevant year and that a sum of Rs. 1,75,000 shown in the books of the petitioner as borrowings on hundies had not been established. He was also of the opinion that there was a credit of Rs. 9,000 in suspense, account regarding which there was no proper explanation. In view of the foregoing, the Income-tax Officer ordered that in all a sum of Rs. 3,40,970 as income from undisclosed sources should be added to the income declared by the petitioner in his profit and loss account. The appeal filed against the order of the Income-tax Officer was unsuccessful. Thereafter, the petitioner filed a petition under section 264 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner only in the assessment year 1961-62, if at all they were assessable. In support of the above proposition, he relied on a decision of the Supreme Court in Baladin Ram v. Commissioner of Income-tax, in which it was observed by the Supreme Court that it was well-settled that in the absence of any accounts in respect of the undisclosed source or when there was nothing to show that the assessee had exercised any option under section 2(11)(i)(a) of the 1922 Act, the only possible way in which income from an undisclosed source could be assessed or reassessed was to make the assessment on the basis that the previous year for such an income would be the ordinary financial year and had to be assessed in the immediately following financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove provision.
Therefore, the order passed by the Commissioner in respect of a sum of Rs. 1,75,000 said to have been borrowed on hundies, Rs. 9,000 traced to an unexplained suspense account, and Rs. 13,261 attributable to the undisclosed stock during the period prior to March 31, 1961, treating them as taxable in the assessment year 1962-63 should be set aside and it is accordingly set aside. The matter is now remitted to the Commissioner to pass a fresh order in the light of this decision and in accordance with law. It is, however, made clear that it is open to the authorities to take such steps as may be available to them in law regarding the above sums against the petitioners. The writ petition is accordingly allowed.
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