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TMI Blog1976 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, the said sum was borrowed by him from various parties. However, later on being required to produce evidence to prove the borrowings the assessee made an affidavit stating to the effect that what was stated in his earlier statement recorded on 24th Nov., 1967 was not correct and that he had nothing to do with the said sum of Rs. 2,90,000 which was found from the locker of Chimanlal. The ITO considered the assessee's statement recorded on 24th Nov., 1967 and also his subsequent affidavit and came to the conclusion that the assessee's statements made in the subsequent affidavit were not believable and that since the assessee had failed to prove the source of the said sum of Rs. 2,90,000 which was given to Chimanlal N. Joshi on 31st May, 1967, the said sum of Rs. 2,90,000 was liable to be included in the assessee's total income for the asst. yr. 1967-68 as income from undisclosed sources. In this view of the matter, the ITO included Rs. 2,90,000 as income from undisclosed sources while assessing total income for the asst. yr. 1967-68. 3. In the course of the assessment proceedings for the asst. yr. 1967-68 it came to the notice of the ITO that the assessee had spent Rs. 11,000 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeal being ITA No. 393 (Ahd) of 1975-76. 6. On examining the records of the assessment proceedings in the asst. yr. 1968-69 the learned CIT, Gujarat IV, Ahmedabad found that the assessee was assessed to income tax on total income of Rs. 6,992. In the view of the learned CIT since according to the statement of the assessee recorded on 24th Nov., 1967 the sum of Rs. 2,90,000 was given to Chimanlal N. Joshi on 31st May, 1967 the said amount was liable to be included in the assessee's total income for asst. yr. 1968-69. In the view of the learned CIT the date 31st May, 1967 fell the previous year relevant to the asst. yr. 1968-69 and therefore, the amount of Rs. 2,90,000 could be assessed only in the asst. yr. 1968-69. He, therefore, issued a notice calling upon the assessee to show cause why an order under s. 263 of the Act directing the said amount of Rs. 2,90,000 to tax in asst. yr. 1968-69 should not be passed. In response to this notice objections in writing were raised by the assessee. The learned CIT however, by his order dt. 18th Jan., 1975 rejected the contentions raised on behalf of the assessee and held that the assessment for the asst. yr. 1968-69 made by the ITO was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1967 made by the assessee by its order dt. 26th March, 1974 confirmed the additions of Rs. 2,90,000. Chimanlal N. Joshi has not sought any reference to the High Court on the question of inclusion of the said amount of Rs. 2,90,000. In other words, addition of Rs. 2,90,000 in the assessment of Chimanlal N. Joshi for the asst. yr. 1968-69 has become final and conclusive. The learned representative for the assessee urged before us that as the addition of the said amount has become final in the case of Chimanlal N. Joshi the very same amount cannot be added in the case of the assessee. His argument was that same amount cannot be assessed in the hands of two persons. Now, it may be pointed out that when the learned CIT took action under s. 263 of the Act as stated above it was brought to his notice that the said amount had been assessed in the hands of Chimanlal N. Joshi and its assessment in his hands had become final in view of the decision of the Tribunal. The learned CIT, however, proceeded to give direction to the ITO to include the said amount in the assessee's assessment for the asst. yr. 1968-69 because it was not known whether Chimanlal N. Joshi was pursuing the matter further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pointed out to us which indicates that the assessee had admitted that the amount of Rs. 11,000 was spent for the repairs of the house. The question regarding source of the amount of Rs. 11,000 would arise only after it is found that it was spent for repairs. In our opinion, therefore, the question of addition of Rs. 11,000 required further investigation. Having regard to the evidence as it stands on record the addition cannot be sustained. We, therefore, set aside the order of the authorities below making addition of Rs. 11,000 on account of unexplained investment in repairs of house made in asst. yr. 1967-68 and refer the question regarding this addition back to the ITO for further investigation. 11. The addition of Rs. 13,000 made on account of investments made in the firm of Maganlal Babulal Shah suffers from the same infirmity inasmuch as no proper investigation appears to have been made. Our attention was drawn to the copy of the account of the assessee in the books of Maganlal Babulal Shah and we find it difficult to understand from this account as to how addition of Rs. 13,000 could be made on the basis of the entries made in this account. One of the credit entries made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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