COMMISSIONER OF INCOME TAX Vs. J ALEXANDER

JUDGEMENT

(1.) This appeal by the Revenue under Section 260-A of the Income Tax Act, 1961 [for short 'the Act'] is directed against the order passed by the Income Tax Appellate Tribunal in Appeal No. 798/Bang/2006, dated 29.8.2008 relating to the assessment year 1985-86 in respect of the respondent assessee.

(2.) The assessee had declared return of income for the assessment year in question. The Assessing Authority in terms of the assessment order dated 31.3.2004 [copy at Annexure-C] had rejected the return and had added certain amount representing the deposits in various branches of the Karnataka Bank in the name of third persons on the premise that the fixed deposit receipts were found in the possession of the assessee during the search operation and in the follow up action it was found that the application form for making the deposits with the Bank had been in the handwriting of the very assessee and moreover the persons in whose names the deposits stood were not able to substantiate the source of income for having deposits of this extent and, in fact, the persons in whose names the deposits stood were neither traceable nor had responded to the notices issued by the income-tax authorities.

(3.) The Assessing Authority treated the deposits as undisclosed investment by the assessee and added equivalent income to the income of the assessee for the relevant year and concluded the assessment on such premise.