CHOITHRAM BEGRAJ LALVANEY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application by the assessee under S. 256(2) of the IT Act, 1961 (the "IT Act"), for a direction to the Tribunal to state the case and to refer the following questions, said to be of law, to this Court for opinion :

(2.) SHRI Thakar, learned counsel for the assessee, has filed a petition restricting the application to question No. 2 and the refrained question No. 5 and thus we restrict this application to the following two questions :

(3.) CONSIDERING the salary of the assessee and the petty amount of interest that he received and the occupation his family members were doing, the ITO was of the view that the assets standing in the names of his family members were, in fact, the assessee's own property and the assets were disproportionate to the known sources of income of the assessee. The assessments of the wife and son for the years 1967 68 to 1973 74 were reopened. Notice under S. 148 was issued to the assessee on 14th Feb., 1975. Notice under S. 142(1) was also issued, but the assessee failed to file the return. On 20th March, 1976, the assessee filed a return of income along with a written statement showing income from salary and interest, the total of which was shown at Rs. 6,281. Statements of the assessee and the members of his family were recorded on solemn affirmation. According to the assessee, he had income only from salary and interest. His wife was doing tailoring business and son was doing radio repairing business and they had their own independent source of income out of which they had purchased the properties standing in their respective names. The assessee further stated that he and his family members had substantial "778" lottery winnings, that his wife had taken a loan of Rs. 20,000 from Shri Gowekar and that the son had taken a loan of Rs. 15,000 from M/s Alfa Engineering Company, Bombay. In the enquiry, it was also found that the assessee was doing the business of selling imported wrist watches, etc., in Amravati.