COMMISSIONER OF INCOME TAX Vs. ASRANI T P

JUDGEMENT

(1.) A short but interesting question arises in this reference which is at the instance of the CIT under s. 256(1) of the IT Act, 1961. The question which stands referred to us reads as follows :

(2.) A few facts may be stated : The assessee is an individual who migrated to India in 1947 as a refugee consequent upon the partition of India. In Karachi, he was the proprietor of an export and import business carried on by him in the name and style of Indian Traders. He was also a railway contractor. According to him, prior to his departure from Pakistan, he had sold away all his assets and brought into India an amount of Rs. 55,000 in cash. This contention of the assessee, viz., that he had brought a sum of Rs. 55,000 from Pakistan was the subject- matter of a dispute between the assessee and the Department, which dispute was ultimately resolved by the Tribunal in relation to the appeals for the asst. yrs. 1952-53, 1956-57 and 1957-58. The Tribunal accepted this statement of the assessee. Thereafter the customs authorities raided a locker which stood in the name of the assessee with the Punjab National Bank Ltd. and discovered a cash amount of Rs.47,000 therein. Thereupon, criminal proceedings were started against the assessee, which ultimately resulted in his conviction for contravention of the Foreign Exchange Regulation Act,1947. However, the amount of Rs. 47,000, which had been seized by the Customs authorities, was released by the First Class Magistrate, Central II, Delhi. The ITO, however, received the necessary information and on the basis of such information he included the said amount of Rs. 47,000 in the assessment of the assessee for the asst. yr. 1956-57 ; the amount was included under the head "Other sources". The assessee carried the matter in appeal to the AAC, and in that appeal the AAC held that the amount of Rs. 47,000 should be treated as income for the asst. yr. 1957-58 and as such this amount was added by him to the income for the asst. yr. 1957-58 after issuing notice of enhancement.

(3.) THE assessee carried the matter in further appeal to the Tribunal. Before the Tribunal the assessee urged that the AAC was totally in error in the view he took of the provisions of s.297(2) (k) of the Act of 1961, by reason of which he applied Expln. 2 to s. 153(3). THE Tribunal upheld this contention, holding that the AAC had wrongly pressed into service Expln. 2 to s. 153(3). THE Tribunal further held that since the original assessment was made under the provisions of the old Act and had become final, the AAC had exceeded his jurisdiction in sustaining the order of the ITO. It did not dilate over the other contentions of the assessee. In the view that it had taken, the Tribunal allowed the appeal of the assessee and held that the reassessment was beyond the period prescribed in s. 153(1). Being aggrieved by the said decision of the Tribunal, the CIT has preferred this reference. In our opinion, the question referred to us may be reframed as follows :