COMMISSIONER OF INCOME TAX Vs. BHARATHAN R

JUDGEMENT

(1.) -

(2.) THESE three petitions under section 256(2) of the Income-tax Act, 1961, relate to the assessment made on the assessee one R. Bharathan for the assessment year 1982-83. The assessee is an abkari contractor. After being satisfied that the return did not truly reflect the income of the assessee, the assessing authority came to the conclusion that the assessee had sold 1,27,798 litres of arrack as against 58,950 litres accounted for. There was thus an unaccounted sale of 68,848 litres. On this basis, the assessing authority reached the conclusion that there was undisclosed income to the extent of Rs. 7,50,124. The assessing authority also found income from undisclosed sources to the extent of Rs. 19,05,898 out of which he deducted an amount of Rs. 7,55,124 added as undisclosed business income and thus fixed the income those sources at Rs. 11,50,774. The assessing authority completed the assessment accordingly. The Commissioner (Appeals) modified the order to the extent that he limited the addition from undisclosed sources to Rs. 8,21,233 out of which he deducted an amount of Rs. 1,10,000 as explained. He confirmed an addition of Rs. 7,50,124 from business, and since the increase in wealth of Rs. 7,11,233 which resulted in the addition of income from undisclosed sources was less than his amount, no separate addition was made under the head "Other sources.

(3.) WHETHER, on the facts and in the circumstances of the case and the total investment and accretion to wealth according to the assessment order being Rs. 19,05,898 and the income of Rs. 7,55,124 assessed under the head Business having been given set off in the assessment and the balance having been brought to assessment only under the head other sources, the Tribunal is right in law and fact in reducing the addition from Rs. 19,05,898 to Rs. 8,21,233 by confining its consideration to Rs. 8,21,233 assessed only under the head Other sources and holding that the submission.... that it should be assessed under the head Other sources is safer and more reliable. Is not the above approach and order with reference to the addition not sustained by the Tribunal wrong and unsustainable in law and fact