COMMISSIONER OF INCOME TAX Vs. NANKCHAND JAIN

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Madras, has referred to this court under section 256(2) of the Income-tax Act, 1961, the following question for its opinion :

(2.) THE assessment year is 1970-71. Initially, the respondent, hereinafter referred to as assessee, returned a loss of Rs 4,860 for the assessment year 1970-71. Subsequently, a revised return was filed accounting for in come in a sum of Rs. 34,790. While finalising the assessment, the assessment, the Income-tax Officer noticed that there were no drawings for domestic expenses. It was also found that the assessee had contributed to a chit fund a sum amounting to Rs. 46,000 up to October 16, 1969, and as the assessee was not able to account for the resources out of which the contributions to chit funds were made, the said was treated as undisclosed income of the assessee. Likewise towards domestic expenses, a sum of Rs. 5,000 was fixed and that sum was also treated as the undisclosed income of the assessee. On that basis, the assessment was finalised.

(3.) ON behalf of the Department, it was argued before the Tribunal that the explanation given for meeting domestic expenses was not acceptable and the estimate towards that at a sum of Rs. 5,000 was reasonable Regarding contribution to the chit fund, it was urged before the Tribunal that the Inspecting Assistant Commissioner obtained full particulars from the concerned chit fund at Bangalore and only on the basis of those particulars furnished by the chit fund, it was found that the assessee alone had made the contributions. Therefore, the case of the assessee that he did not make the contributions but one Parasuraman made them should not be accepted.