JAGDISH PROSAD AGARWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under S. 256(1) of the IT Act, 1961 for the asst. yrs. 1975-76 and 1976-77, the following question of law has been referred to this Court.

(2.) THE facts shortly stated are that the assessee is a partner in the firm of Durga Dosiery having one-third share. The assessee's premises were searched on 20th Jan., 1976 and certain books of account and other documents were seized. On a scrutiny of the seized books of account the ITO came to the conclusion that the assessee had not disclosed all his transactions in his books of account. The seized books of account were not closed. On several dates it was found that the debits exceeded credits. The ITO held that the excess debits represented purchases of goods over and above what was recorded as sold. The assessee, however, did not admit that the seized books belonged to him and requested the IAC to give a direction that the excess of debits over credits amounting to Rs. 3,30,845 and Rs. 1,03,860 relating to the asst. yr. 1975-76 and 1976-77 should not be included in his income tax assessment. The IAC, however, directed that the said amounts should be included in the assessments of the assessee for the respective years.

(3.) WHEN the matter came up in appeal before the Tribunal it dismissed the assessee's appeal with the following observation: