VIJAY KUMAR SARAF Vs. INCOME TAX APPELLATE TRIBUNAL

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the Income-tax Act, 1961 (for short "the Act"), at the instance of the assessee/applicant with a prayer for a direction to the Income-tax Appellate Tribunal, New Delhi (for short "the ITAT"), to state the questions of law proposed for decision of this court.

(2.) THE business premises of the applicant, named, Vijay Abhushan Bhandar, were raided and searched by the Income-tax Department and jewellery and ornaments worth Rs. 1,00,600 were seized. An order under Section 132(5) of the Act was passed by the Inspecting Assistant Commissioner, Gwalior. THE applicant was then served with an assessment order for the year 1986-87. THE applicant filed a written reply before the Assessing Officer taking a plea that the jewellery and ornaments seized were the assets of the ancestral business of the applicant's father. So far as the investment for purchase of one scooter in the assessment year in question was concerned, the stand taken was that he was assessed for the same in the previous year 1985-86.

(3.) LEARNED counsel appearing for the assessee argued that in order to attract Section 69 of the Act, the Assessing Officer has first to record a finding that the alleged investments were made in the financial year preceding the assessment year and those were not recorded in the books of account of the assessee. It is argued that in the absence of the above finding, Section 69 of the Act could not be resorted to, to treat the investments as income of the assessee for the financial year in question. Therefore, the question of law does arise. With regard to the scooter investment, it was argued that the same having been already assessed in the year 1985-86, it could not have been reassessed for the financial year 1986-87.