S.P. Goyal, J.
1. In the accounting year relevant to the assessment year 1963-64, the assessee had shown in his accounts the amounts of Rs. 10,000, Rs. 20,000 and Rs. 10,000 credited in the names of (i) Messrs. Tola Singh Sohan Singh, (ii) Messrs. Bhagwan Dass Sant Parkash, and (iii) Messrs. Vashu Mal Ram Lal. The confirmatory letters of the creditors filed by the assessee were duly considered by the Income-tax Officer and having been satisfied, he treated the said credits to be genuine. Later on, it came to the notice of the Income-tax Officer that the said creditors have been dealing in hawala business and were merely name-lenders. On this information, he issued a notice under Section 148 of the Income-tax Act, 1961 (for short 'the Act'), and initiated reassessment proceedings. During these proceedings, the assessee produced two of the creditors with the account books but none appeared on behalf of Messrs. Vashu Mal Ram Lal. However, the Income-tax Officer did not believe the genuineness of the credits and added the amount of Rs. 40,000 to the returned income. On appeal, the order of the assessing authority having been reversed, the Revenue approached the Appellate Tribunal which upheld the genuineness of the credits appearing in the names of Messrs. Tola Singh Sohan Singh and Messrs. Bhagwan Dass Sant Parkash, but restored the order of the assessing authority qua the amount of Rs. 10,000 appearing in the name of Messrs. Vashu Mal Ram Lal. On an application made by the assessee.the Tribunal referred the following question under Section 256(1) of the Act for our opinion :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the reassessment proceedings initiated by the Department under Section 148 of the Income-tax Act, 1961, are valid?'
2. The Appellate Assistant Commissioner had reversed the order of the assessing authority holding that all the particulars had been duly furnished at the time of the original assessment and there was no good reason for initiating reassessment proceedings on merits. The Tribunal reversed that finding with the following observations :
'The question for consideration is whether the Appellate Assistant Commissioner rightly concluded that the Income-tax Officer was not right in law in initiating the reassessment proceedings. The Revenue urges that the reassessment proceedings were initiated, inasmuch as the assessee failed to disclose fully and truly all the material facts necessary for its assessment. Information was gathered by the Income-tax Officer that the creditors in question are merely name-lenders and they are dealing in hawala business. It is on the basis of this information which he gathered from the cases of the other parties who had dealt with these creditors, reassessment proceedings were started. We do not agree with the view of the Appellate Assistant Commissioner that the Income-tax Officer illegally acted in reopening the assessment. It is not a case of change of opinion. As the Income-tax Officer came to know from the cases of other parties that the creditors in question are merely name-lenders, he was justified in starting the reassessment proceedings. Simply because the names of the creditors were brought to the notice of the Income-tax Officer at the time of the original assessment proceedings and the particulars of the creditors were given, it cannot be said that the assessee had disclosed fully and truly all the material facts necessary for its assessment. What the Income-tax Officer believed is that the information furnished in respect of the credits by the assessee was not true and, therefore, in our opinion, he rightly started the reassessment proceedings. We, therefore, reverse the finding of the Appellate Assistant Commissioner in this regard.'
3. It is not necessary to enter into any detailed discussion on the point involved as the same stands squarely covered by the decision of the Supreme Court in ITO v. Lakhmani Mewal Das : 103ITR437(SC) and of this court in Jai Singh v. CIT . In both these cases, on identical facts, it was held that there was no reason for the assessing authority to believe that the assessee had failed to disclose fullyand truly all the material facts necessary for the assessment. Learned counsel for the Revenue to support the view of the Tribunal relied on another Division Bench decision of this court in Kirpa, Ram Ramji Dass v. ITO . This decision was duly considered in Jai Singh's case and found to be distinguishable inasmuch as in the former case, the alleged name-lender had given a statement that he never advanced the loan in dispute to the assessee. In the present case also, no such statement was made by the creditors and as such the decision in Kirpa Ram Ramji Dass' case is of no avail to the Revenue.
4. In the result, the aforementioned question is answered in the negative, that is, in favour of the assessee and against the Revenue. No costs.