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Commissioner of Income-tax Vs. Lachhman Dass Oswal - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 52 of 1975
Judge
Reported in[1980]126ITR446(P& H)
ActsIncome Tax Act, 1961 - Sections 148
AppellantCommissioner of Income-tax
RespondentLachhman Dass Oswal
Appellant Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Respondent Advocate B.S. Gupta, Adv.
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply..........income-tax officer and sustained by the appellate assistant commissioner of income-tax ?'2. the total income of the assessee, who is an individual, relating to the assessment year 1957-58, was initially assessed at rs. 2,37,899 by the ito, vide order dated april 29, 1960. later on, a notice under section 148 of the i.t. act was served on the assessee on march 30, 1966, calling upon him to furnish a return of his total income. in the return filed in response thereto, the total income shown was as already assessed. in the reassessment completed by the ito on february 25, 1969, two additions of the amounts of rs. 1,968 and rs. 26,386 were added from speculation business and as income from undisclosed sources, respectively. the order of the assessing authority was confirmed, on appeal, by.....
Judgment:

S.P. Goyal, J.

1. The following question has been referred to this court at the instance of the revenue by the Income-tax Appellate Tribunal, Chandigarh:

'Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in deleting the addition of Rs. 26,386 made by the Income-tax Officer and sustained by the Appellate Assistant Commissioner of Income-tax ?'

2. The total income of the assessee, who is an individual, relating to the assessment year 1957-58, was initially assessed at Rs. 2,37,899 by the ITO, vide order dated April 29, 1960. Later on, a notice under Section 148 of the I.T. Act was served on the assessee on March 30, 1966, calling upon him to furnish a return of his total income. In the return filed in response thereto, the total income shown was as already assessed. In the reassessment completed by the ITO on February 25, 1969, two additions of the amounts of Rs. 1,968 and Rs. 26,386 were added from speculation business and as income from undisclosed sources, respectively. The order of the assessing authority was confirmed, on appeal, by the AAC.

3. In the appeal before the Tribunal, the assessee gave up his challenge to the addition of the amount of Rs. 1,968 relating to the speculation business. The addition of the remaining amount was challenged on the ground that the explanation of the assessee as to its source had been erroneously rejected by the assessing authority. The Tribunal, however, refused to go into the adequacy of the assessee's explanation as to the source of the said amount and ordered its deletion on the ground that there was no presumption in law that the cash appearing in the hands of the assessee during a particular accounting year or the investment made during a particular year reflects by any fiction, the assessee's income of that particular accounting year. The view taken by the Tribunal appears to have been based on a decision of the Madras High Court in Vishnukantham Chetty v. CIT : [1958]34ITR678(Mad) , wherein it was held that where there is no evidenceto support the finding that the amount was income which accrued to the assessee in the relevant accounting period, it could not be assessed to tax. With due respect to the learned judges, we are, however, unable to subscribe to this view and the matter has since been authoritatively settled by the Supreme Court in Kale Khan Mohammad Hanif v. CIT : [1963]50ITR1(SC) , wherein it was held (p. 4):

'...that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income.'

4. In view of this authoritative pronouncement by the Supreme Court, in the absence of adequate explanation of the sources of all the amounts in dispute, the ITO was entitled, in law, to treat it as income. The question referred to us, therefore, has to be answered in the negative and against the assessee. But as the Tribunal did not go into the adequacy of the assessee's explanation as to the source of the amount in dispute, the case is remanded for a fresh decision. In the circumstances of the case, the parties are left to bear their own costs.

Bhopinder Singh Dhillon, J.

5. I agree.


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