PATOA BROTHERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS tax reference relates to the assessment year 1970 -71, and has arisen out of these facts. The assessee is an HUF carrying on business of purchase and sale of watches and repairing them. It appears that the upper floor of the building wherein business was carried on, was used as residence by the assessee. On March 4, 1970, the customs authorities conducted a search of the premises and recovered the following articles :

(2.) A notice under Section 139(2) of the I.T. Act, 1961, for short the Act, was served on the assessee on June 5, 1970, and on April 19, 1971, he submitted a return of income of Rs. 4,140. The ITO, however, assessed the total income at Rs. 1,02,610 of which Rs. 98,446 was assessed as deemed income under Section 69A of the Act. This amount of Rs. 98,446 has the following break up :

(3.) THE assessee had in the meantime preferred an appeal against the assessment order to the AAC who confirmed the assessment as made by the ITO. The Appellate Tribunal was thereafter approached by the assessee both against the assessment order as well as the levy of penalty by the IAC. The Tribunal confirmed the order of the AAC as regards the assessment and that of the IAC in so far as the penalty is concerned.