DAHANUKAR S M Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred for our decision under s. 66(2) of the Indian IT Act is :

(2.) THE assessee is an individual and we are concerned with the asst. yrs. 1950-51 to 1954-55 both inclusive, the relevant accounting years being the financial years ending 31st March. One Tankwalla had taken on long lease certain open plots of land at Worli in Greater Bombay. THEse plots were requisitioned under the Defence of India Rule No. 75(1) for the purposes of the military in December, 1942. Later on, the requisitioning was continued under the Bombay Land Requisition Act, 1948, for the purposes of the Home Department of the Government of Bombay. THE owner of these plots (Tankwalla) had mortgaged them with the ABC Bank Ltd. but that bank went into liquidation and the plots were acquired by the assessee from the liquidator of the bank. This was on the 6th September, 1949, during the accounting year 1st April, 1949, to 31st March, 1950, the assessment year being 1950-51. In his return for that year, the assessee did not show any income from property and when questioned before the ITO, the assessee had stated that the Government was considering the question of payment of compensation in respect of these properties which had been requisitioned and, therefore, the assessee "could not be sure of the amount that he would receive as rent for the properties". THE assessee did not deny that he was the owner of the property. THE ITO thereupon estimated the income from the properties requisitioned by the Government at Rs. 1,600 for that year and included it in the assessment for the year 1950-51. Similar estimates were made by the ITO for the subsequent years 1951-52 to 1957-58. THEse assessments of property income were made under s. 9 for the asst. yrs. 1950-51 to 1955-56 both inclusive, but for the years 1956-57 and 1957-58 the income was assessed under s. 12 as from "other sources".

(3.) NOW the assessee on his part says that the notices under s. 34(1)(a) could not be issued because the requirements of cl. (a) of s. 34(1) have not been fulfilled. He, however, does not dispute that the notices could be issued under s. 34(1)(b), that is to say, for the asst. yrs. 1955-56 to 1958-59. If notices could not be issued under s. 34(1)(a), then obviously the assessments for the earlier years which are the years in dispute before us would be barred by time. Thus the question resolves itself into a question whether the grounds under s. 34(1)(a) have been made out in the order to enable the Department to assess the assessee under s. 34(1)(a).