COMMISSIONER OF INCOME TAX Vs. JAI RAM PRASAD

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the IT Act (in short, the "Act"). The two questions referred for the opinion of this Court are as mentioned below :

(2.) THE assessee was a partner in a firm during the asst. year 1969 -70. His minor sons and wife were paid interest by the firm. These sums were to the tune of Rs. 6,098. They were not disclosed in the return of income filed by the assessee. The ITO added this amount to the total income of the assessee. Another item added to the total income of the assessee was a sum of Rs. 2,000 for low withdrawals. The assessee's total income was assessed at Rs. 12,580 as against loss of Rs. 1,955. The discrepancy between the assessed sum and the sum returned being more than 20 per cent of the assessed income, proceeding for levy of penalty was initiated. Notice under S. 274(2) of the Act was issued. The assessee denied the charge of concealment of income. In regard to low withdrawals, the assessee claimed that the sum of Rs. 1,215 shown by him was correct. The IAC rejected the stand of the assessee on both counts.

(3.) LEARNED counsel for the Department endeavoured to distinguish Muthiah Chettiar's case (supra), but he failed in this behalf. The Notes for Guidance prescribed for the asst. year 1969 - 70 were in existence even prior thereto. Merely upon the notes without a specific column, the Supreme Court held, no obligation was cast. The present case must, therefore, be decided upon the ratio of the Supreme Court case mentioned above.