COMMISSIONER OF INCOME TAX Vs. TIWARI JHUMAR LAL

JUDGEMENT

(1.) THESE four references arise out of proceedings for reassessment under Section 34(1)(a) of the Indian I.T. Act, 1922 (hereinafter called "the old Act"), in respect of M/s. Jhumartal Swaroop Lal (referred to hereinafter as "the assessee") and as common questions have been referred to this court for decision in these references, it would be proper to dispose of them by a common order.

(2.) THE assessee is a partnership firm, which enjoyed monopoly rights of stone quarrying in the erstwhile States of Karauli and Bharatpur and in the Hindaun area of the former State of Jaipur. THE assessee was a nonresident, with its head office at Jaipur and carried on the business in the Indian States as also in the taxable territory. THE assessee did not file any return nor had paid any income-tax in respect of the assessment years 1940-41 to 1948-49. During the course of the proceedings for the assessment of income-tax for the assessment year 1949-50, it came to the notice of the ITO that a large part of the sale proceeds were realised by the assessee by sending railway receipts consigned to self through V.P.P. to different parts of the territory, which at that time were comprised in British India. THE ITO, having reason to believe, on the basis of the facts which came to his notice that the income of the assessee which accrued, arose or was received in the then taxable territories had escaped assessment in respect of the assessment years 1940-41 to 1948-49, gave notices to the assessee tinder Section 34(1)(a) of the Indian I.T. Act, 1922 (hereinafter referred to as "the old Act"), with the prior approval of the CBR. THE notices for assessment in respect of the escaped income were issued on March 6, 1962. On March 28, 1962, the process-server, Bhorilal, submitted his report which, on translation, reads as under :

(3.) WE may observe that they are substantially the same as have been referred to in the earlier two references. In Reference No. 31 of 1970, three questions have been referred, one at the instance of the assessee and two at the instance of the revenue, which are as under :