COMMISSIONER OF INCOME TAX Vs. SAT PARKASH AGARWAL

JUDGEMENT

(1.) The assessed, Sat Parkash Agarwal, it an individual. This reference relates to the assessment year 1967 -68 for which the assessed's previous year was the financial year 1966 -67.

(2.) It appears that on some day prior to May 31, 1966 (the exact date is not available) the assessed's wife, Smt. Kamlawati, had made a disclosure under s. 24 of the finance (No. 2) Act of 1965, in respect of a sum of Rs. 5,000. There were similar declarations on behalf of the assessed's four minor children each in respect of a sum of Rs. 5,000. As required by the Finance Act, above refereed to, these declarations were accepted by the CWT and taxes were paid in accordance therewith as contemplated by s. 24 of the said Finance Act.

(3.) In the books of the assessed for the financial year 1966 -67 relevant to the assessment year 1967 -68, five credits appeared each in respect of Rs. 5,000 in the names of the wife and minor children of the assessed. Two of these credits appeared in April, 1966, and the rest in July, 1966. When called upon to explain the nature and source of the above credits the assays relied upon the disclosures that had been made under the Finance Act of 1965. The ITO, however, observed that those declarations and their acceptances conferred an immunity on the declarants concerned but that if it was found that some other assessed had got benami declarations made in the names of the members of his family, employees, etc., it was open to the ITO to examine the matter in the course of the assessment of such person and if he found that the amount declared belonged to such person, to assess it in his hands in spite of acceptance of the declarations made by the benamidars. The ITO referred to an admission made by the assessed in the course of the assessment proceedings that neither his wife nor any of his minor children had any apparent source of income except interest income shown in their names in the books of the firm and concluded that the money actually belonged to the assessed. He included it in the assessment as the assessed's income from undisclosed sources. He also disallowed an interest of Rs. 1,411 shown as having been paid in respect of the above deposits.