DIWAN ENTERPRISES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This common order shall govern the disposal of CWP 3868, 3869 and 3870 of 1997 between the same parties.

(2.) The assessee derives income from manufacture of high class polypropyline and polythene tubing films and bags. For the assessment year 1991-92 return of income was filed on 29.1.1991 declaring income of Rs. 29,910.00 . During the course of assessment proceedings, it was noticed, inter alia, that M/S. R.R. Jindal had advanced a loan in cash totalling to Rs. 30,000.00 to the assessee. The assessee was confronted with the provisions of Section 269-SS(b)of the Income-tax Act,1961 whereupon he surrendered the said amount to be treated as income of the previous year. The assessing officer accepted the surrender as income of the assessee. The interest paid by the assessee on the loan of Rs.30,000.00 @ 10% p.a. was also disallowed and added back to the income of the assessee. By order of assessment dated 31.8.1992, the assessing officer also directed as under :-

(3.) 1 As against this order, the petitioner preferred a revision under Section 264 of the Act which has been 3.2 The order of penalty under Section 271(1)(c) and the order rejecting the revision petition the against are the subject matter of CWP 3869/97.