INCOME TAX OFFICER Vs. VIDYA SAGAR GUPTA

JUDGEMENT

(1.) VIDYA Sagar and his brother, Anand Sagar, were partners of firm M/s. Shahzada Hosiery Mills Ltd., Ludhiana. For the assessment year of 1963-64. (accounting year 1962-63), the respondent-firm filed a return with the ITO, Ludhiana, on February 18, 1964. Trading account, profit and loss account, balance-sheet, etc., for this assessment year were attached with this return. It may be noticed here that the return was not signed by anyone, but the documents in the form of statement of accounts, which were attached with the return, were signed by VIDYA Sagar, respondent. A declaration under Section 184(7) of the I.T. Act, 1961, hereinafter referred to as " the Act", that VIDYA Sagar and Anand Sagar were the partners of the firm at the time of filing the return, (...?...) duly signed by both (sic) these partners was also attached to the return. In this return, the respondent declared Rs. 62,102 only as income and understated the profit by Rs. one lakh. The correct gross profit amounted to Rs. 2,38,579, but it was declared as Rs. 1,38,579,

(2.) SHRI B.D. Gupta, P.W. 1, ITO, Ludhiana, who was seized of the tax matter, asked Vidya Sagar, respondent, on June 20, 1967, to explain the discrepancy in the profit, but he could not reconcile the difference, even with the help of his counsel and accountant. SHRI B. D. Gupta then recorded the statement of Vidya Sagar, respondent, on June 20, 1967, as exhibit P. E. on solemn affirmation, which is :

(3.) THE learned trial Magistrate formed the view that it was not proved from evidence that Ex. P.H. was made by Vidya Sagar, respondent, or was signed by him. Shri B.D. Gupta, ITO, before whom Vidya Sagar, respondent, had signed only on 2 or 3 occasions could not have the sufficient proficiency to identify his signatures on Ex. P.H. Taking Ex. P.H. to be the only evidence to connect the respondent with the commission of the offence, which according to the learned trial Magistrate was not proved to have been signed by Vidya Sagar, he acquitted both of them. THE ITO has filed this appeal contesting the judgment of acquittal passed by the learned trial Magistrate.