KANJI RANCHHOD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference arises out of reassessment proceedings under S. 34(1)(a) of the IT Act, 1922, of an HUF carrying on business in motor spare parts and cigarettes. The proceedings were in respect of the asst. year 1953 1954 of which the corresponding year of account was Samvat year 2008.

(2.) THE original assessment for the asst. year 1953 54 was completed on 2nd Aug., 1957, the total income then assessed being Rs. 14,868 consisting of profits and income from business, interest and property. On an appeal by the assessee, the AAC by his order dt. 31st Jan., 1958, reduced it to Rs. 14,420. It is an admitted fact that the assessee had produced the books of account pertaining to both the businesses, but had not produced along with those books the balance sheets. At a later date, which is not quite clear from the statement of the case, the ITO learnt that an amount of Rs. 21,352 was lying deposited with the Morvi Mercantile Bank Ltd., Morvi, in the name of the assessee. The ITO, therefore, decided to initiate proceedings under S. 34(1)(a) and sought permission therefor from the CIT. The permission was sought for on the ground that :

(3.) THE assessee filed appeals against both these orders before the AAC. The AAC deleted the amount of Rs. 13,300 from the assessment for the asst. year 1954 55 but retained the addition of this amount in the assessment for the asst. year 1953 54. Before the AAC, the assessee raised four contentions :