CHUNNILAL SURAJMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961, we are concerned only with the assessment year 1949-50. The accounting period of the assessee was from Diwali to Diwali, i.e., year commencing from October, 1947. The assessee is a Hindu undivided family. The questions referred to us for our opinion are:

(2.) THE assessee was assessed for the assessment years 1948-49, 1949-50 and 1950-51. Assessment orders were passed on December 25, 1948, October 31, 1951, and October 31, 1951, respectively. Several years later on February 21, 1965, the Income-tax Officer sent a proposal to the Central Board of Direct Taxes seeking their approval to reopen the assessment for the aforesaid three years. In the view of the Income-tax Officer, the assessee was possessed of a house at Deoghar which ostensibly stood in the name of Lakshmi Devi, wife of Hanuman Prasad Sharaf. THE income represented by the unexplained investment in the house property had escaped assessment. THE unexplained investment, according to the Income-tax Officer, was to the tune of Rs. 1,45,600. With the approval of the Central Board, the assessments were reopened. In answer to the notice under Section 148 of the Income-tax Act, the assessee filed a return declaring "Nil" income. After hearing the assessee's representative, the Income-tax Officer allocated the unexplained investment over the house as follows: <FRM>JUDGEMENT_141_ITR160_1986Html1.htm</FRM>

(3.) UPON those facts, the concluded finding of the Appellate Assistant Commissioner was as follows :