LAWS(MPH)-1978-5-2

NATHURAM KAPOOR Vs. INCOME TAX OFFICER

Decided On May 06, 1978
NATHURAM KAPOOR Appellant
V/S
INCOME-TAX OFFICER, 'B' WARD Respondents

JUDGEMENT

(1.) THIS is a writ petition by Nathuram Kapoor to quash the notice issued by the ITO, "B" Ward, Indore, dated March 29, 1973, under Section 148 of the I.T. Act, 1961, for reopening of his assessment for the assessment year 1956-57.

(2.) THE assessee is a wholesale dealer in cloth and yarn. For the assessment year 1956-57, the accounting year of which ended on 31st March, 1956, the petitioner was assessed on a total income of Rs. 33,077 under Section 23(3) of the Indian I.T. Act, 1922, as per return filed by him. Along with the return, the petitioner filed profit and loss account. THE ITO, "A" Ward, Indore, by his order of assessment dated January 15, 1957, accepted the return stating that there was all round improvement in results due to the improved tone of the market. It appears that the attention of the ITO was not drawn to the fact that there was a cash credit entry in the books of account for that year showing a deposit by Capt. Narendra-singh Motilal Bhandari to the tune of Rs. 1,59,700. THE list of sundry creditors showed that a sum of Rs. 1,01,003-2-0 was due to him. THE khata of the aforesaid Capt. Bhandari in the books of the petitioner was credited with various sums as representing cash deposits made between April 2, 1955, and November 7, 1955, totalling Rs. 1,64,700 on November 7, 1955, as detailed below : <FRM>JUDGEMENT_257_ITR120_1979Html1.htm</FRM>

(3.) ON October 16, 1962, the ITO also examined Capt. Bhandari who denied ever having made any deposits with the petitioner, stating that he was in an extremely bad financial condition and the question of his advancing money to the petitioner did not arise. The material portions of his statement are given below :