COMMISSIONER OF INCOME TAX Vs. SOORAJMALL NAGARMULL

JUDGEMENT

(1.) AT the instance of the CIT, the following two questions have been referred to this Court under s. 256(2) of the IT Act, 1961 ("the Act"), for the asst. yr. 1957-58 :

(2.) THE facts relating to the first question are that the original assessment for the asst. yr. 1957-58 was completed on 22nd June, 1962. Premises Nos. 61, 57, Harrison Road, and 212, Cornwallis Street, were searched by the Customs department and the officers of the IT Department from 4th July, 1956 to 7th July, 1956. The business of the assessee was carried on from the premises No. 61, Harrison Road (Mahatma Gandhi Road). During the search of the premises, No. 61, M. G. Road, a large quantity of jewellery was found therein. The assessment was reopened under S. 147(a) of the Act on the ground that income had escaped.

(3.) IN appeal before the AAC, the assessee objected to the reopening of the assessment under s. 147 but that objection was overruled by the AAC. The assessee next objected to the addition of Rs. 6 lakhs to its income. It was urged that only a part of the premises of 61, M. G. Road, was used as business premises and that no jewellery was found in the premises of the assessee-firm. It was urged that the value of the jewellery found in the portion occupied by the partners was included in their assessments and reference was made to the assessment order of the partner, Shri D.N. Jalan. The AAC accepted the assessee's contention and deleted the addition of Rs. 6 lakhs.