D.C. RASTOGI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THOUGH the appeal was admitted long ago in the year 2000, no question of law has been framed. Having considered the materials on record and with the assistance of the counsel for the parties, the following question of law is framed for consideration:

(2.) IT is contended by Mr. Monga, learned counsel for the appellant, that having regard to the express language of section 68, the recourse to estimation by the tax authorities was unwarranted. It was submitted that even if the reasoning of the lower authorities were to be affirmed with regard to the finalization of assessment vis -a -vis other heads of income, such course was not available to them in view of the clear phraseology adopted by Parliament in section 68 of the Income -tax Act, 1961.

(3.) THE brief discussion would show that in both the rounds, the Assessing Officer had rejected the assessee's books/account. However, the figure of the sums credited in the books maintained by the assessee for the concerned year remained unexplained, i.e., cash of Rs. 15,17,060. In the opinion of the court, the language of section 68 does not admit to the interpretation that the reference to "any sum" which is found to be "credited" in the assessee's books for any particular year can mean only one thing, i.e., the actual sum found in the books for the concerned previous year and which is unexplained. In this case, that amount was Rs. 15,17,060. The judgment of the Madras High Court is only an authority for the proposition that if the profits reported by the assessee are not accepted on the basis of the supporting accounts, the Income -tax Officer can process such profits by estimation after rejecting the books. That was not a case where interpretation of section 68 was called for. It is one thing to say that for separate heads of income such as profits, capital gains, etc., which would involve reporting of accounts maintained on an elaborate basis and also detailing expenditure, etc., the Assessing Officer may have the discretion to reject accounts and arrive at the income on the basis of estimation. However, in the case of section 68, there cannot be any estimate even if for the rest of the accounts, such an exercise is validly undertaken. This is for the simple reason that the expression "any sum" refers to any specific amount and nothing more.