COMMISSIONER OF INCOME TAX Vs. REKHA BAI

JUDGEMENT

(1.) THE following questions of law were formulated by the Revenue for entertaining these cases:

(2.) THE assessee is an individual carrying on the business of financier by giving her husband a power of attorney. On 9. 8. 1989, a search was conducted under Section 132 of the Income Tax Act in the premises of the assessee and several incriminating documents were seized. The pronotes to the value of Rs. 28,16,900/-, the note books containing entries of amounts advanced and repayments received back, the details of amounts advanced to various parties and the details of date wise interest receipts were seized. After a detailed examination and after granting sufficient opportunity to the assessee, the Assessing Officer made an assessment. While making the assessment, he made an addition of Rs. 15,21,120/-, Rs. 6,05,163/- and Rs. 10,22,082/- for the three assessment years i. e. 1988-89 to 1990-91 under the head income from other sources.

(3.) AGGRIEVED by the orders of assessment, the assessee preferred appeals before the Commissioner of Income Tax (Appeals ). The Commissioner of Income Tax (Appeals) allowed the appeals by a common order holding that the concealed income should not be entirely assessed in the hands of of the assessee and should be divided among the assessee, her husband, her husbands HUF and her son. He further held that the face value of the pronotes cannot be taken as the amounts actually lent and fixed the concealed income at a much lower figure.