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Commissioner of Income-tax, Bombay-viii Vs. Mangilal Dhanraj - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Application No. 313 of 1983
Judge
Reported in(1984)42CTR(Bom)365; [1985]155ITR71(Bom); [1985]20TAXMAN128(Bom)
ActsIncome Tax Act, 1961 - Sections 147
AppellantCommissioner of Income-tax, Bombay-viii
RespondentMangilal Dhanraj
Excerpt:
.....facts and in the circumstances of the case, the tribunal was justified in holding that the assessee had disclosed fully and truly all material facts regarding location and ownership of primary gold seized from the assessee's premises on 24th january, 1969 ?' 3. we cannot accept mr......due to omission or failure of the assessee to disclose fully and truly all material facts necessary for his assessment year 1969-70 ?(b) whether, on the facts and in the circumstances of the case, the tribunal was justified in holding that the assessee had disclosed fully and truly all material facts regarding location and ownership of primary gold seized from the assessee's premises on 24th january, 1969 ?'3. we cannot accept mr. jetly's submission that there was no full and true disclosure of material facts by the assessee. the assessee had told the ito about the primary fact of seizure. the ito chose not to act upon it. he was, therefore, not justified in reopening the assessment.4. accordingly, the rule is discharged. no order as to costs.
Judgment:

Bharucha, J.

1. At the stage when the assessment of the assessee for assessment year 1969-70 was pending, the Customs authorities carried out a search of his residence and seized 98 gold bars and some currency notes. Information in this regard was passed on to the ITO concerned. The Income-tax Appellate Tribunal found that the correspondence between the ITO and the Directorate of Inspection showed that the assessee had stated before the ITO that some gold and currency had been seized from him. The correspondence also showed that the ITO had been asked to examine the papers seized and to ask the assessee to explain the source of the seized goods. The ITO, however, made the assessment for the assessment year 1969-70 without such enquiries and without making any addition to the income on account of the seized goods. The ITO then decided to reopen the assessment for the assessment year 1969-70 stating that information had been received of the seized goods and he had reason to believe that some income had escaped assessment.

2. The Tribunal held, having regard to the facts found by it, that the assessee had disclosed to the ITO the relevant facts. The ITO was satisfied with the information received and he made the original assessment without any addition to the income. The Tribunal allowed the assessee's appeal and declined to refer the following questions :

'(a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in cancelling the reassessment under section 147(a) of the Income-tax Act, 1961, on the ground that the Income-tax Officer had no reason to believe that any income had escaped assessment due to omission or failure of the assessee to disclose fully and truly all material facts necessary for his assessment year 1969-70 ?

(b) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee had disclosed fully and truly all material facts regarding location and ownership of primary gold seized from the assessee's premises on 24th January, 1969 ?'

3. We cannot accept Mr. Jetly's submission that there was no full and true disclosure of material facts by the assessee. The assessee had told the ITO about the primary fact of seizure. The ITO chose not to act upon it. He was, therefore, not justified in reopening the assessment.

4. Accordingly, the rule is discharged. No order as to costs.


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