VENKATAMMA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE references relate to the same assessee but for three different assessment years, viz., 1959-60, 1960-61 and 1961-62. The ITO noticed in all the three years that certain investments had been made by the assessee and the sources for the same were not properly explained. Therefore, he treated a sum of Rs. 12,500 as income from undisclosed sources for the assessment year 1959-60, Rs. 7,550 for the assessment year 1960-61 and Rs. 43,500 for the assessment year 1961-62. THESE additions made have been confirmed by the AAC and also by the Tribunal. Among the house properties the income from which have been brought to tax in the hands of the assessee, there are three items, viz., premises Nos. 699, 699/1 and 1148 at Devaraja Mohalla, Mysore. The assessee's husband dies on September 5, 1943. It transpires that he executed a deed of settlement in respect of the premises bearing Nos. 699 and 699/1 in favour of the assessee as well as his sons, Krishnappa, Giriappa and Venugopal Naidu. The premises bearing No. 1148 had been purchased by him on May 25, 1943. In the assessment for the year 1958-59, this had been brought to the notice of the ITO. Apparently, he did not make an assessment having regard to these documents but assessed the income therefrom in the hands of the assessee. It was allowed to become final. The income from these properties has also been included in the assessment for the subsequent years. A claim had been made that the income must be treated as belonging to the HUF but that was rejected by the AAC. The Tribunal without any discussion merely affirmed that finding.

(2.) PURSUANT to an order of this court under s. 256(2) of the I. T. Act, 1961, two questions have been referred for the opinion of this court. The first question is in relation to the amounts added as income from undisclosed sources and except for the amounts the question is similar. The second question is common for all the years. The questions are as follows :

(3.) IN the accounting year ended March 31, 1960, the assessee had made investments in the purchase of two properties for a sum of Rs. 7,550. IN the accounting year, relevant to the assessment year 1961-62, the assessee had purchased house property for a sum of Rs. 50,000 but a sum of Rs. 6,500 was yet to be paid in this regard. The ITO, therefore, took the actual investment at Rs. 43,500. The assessee was called upon to explain the investments and the source for those investments. It was claimed by the assessee that her husband left some cash amounting to over Rs. 19,000 when he died in 1943 and together with jewellery she had, and that belonging to her mother-in-law and a dowry amount that had been received at the time of the marriage of her son and some other amounts received from certain parties were available for making the investments. It was also claimed that she had made savings between 1943 and 1948 and the same would amount to about Rs. 32,400. The ITO noticed that by 1958, the investments on house property had been made in a sum of Rs. 17,300 and, therefore, the claim that any cash left by the husband would be available was unbelievable assuming that her husband who was only an employee drawing Rs. 45 per month could have amassed such an amount of cash. No details were given in regard to jewels and to whom it was sold and when it had been sold. There was also no evidence about the receipt of any amount from third party or by way of dowry, except the assertion of the assessee herself. IN these circumstances, the ITO rejected the claim of the assessee and made the additions by way of income from undisclosed sources. The AAC and the Tribunal have confirmed the same.