TMI Blog1969 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... sive of Rs. 15,000 being undisclosed income. For the assessment year 1953-54 the respondents returned Rs. 40,887 as their income from business. The Income-tax Officer discovered an aggregate amount of Rs. 74,692 as "cash credits" which, in his view, were not satisfactorily explained by the respondents. The Income-tax Officer accordingly brought to tax a total income of Rs. 1,31,179 being Rs. 56,487 as income from business and Rs. 74,692 as income from "other sources" and assessed the respondents as an unregistered firm. The Appellate Assistant Commissioner in appeal reduced the income of the respondents from business to Rs. 38,420 and income from "other sources" to Rs. 46,620. In second appeal the Tribunal reduced the income from business t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment ? (4) Whether, on the facts and circumstances of the case and the evidence on record, the Tribunal was justified in directing that the income under the head 'business' for the assessment year 1953-54 be reduced to Rs. 50,000 ? " The High Court declined to answer questions (1) and (2) and answered questions (3) and (4) in the affirmative. The Commissioner appeals with special leave. The judgment of the Tribunal is not a reasoned decision on the questions arising before it : it is cryptic and in parts obscure, and gives no grounds for its conclusion. The judgment again lends countanence to a method of assessment which the Indian Income-tax Act does not warrant. In paragraph 5 of the order the Tribunal observed that the cash cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year under appeal is reduced to Rs. 50,000 only. " The unexplained cash credits found by the Appellate Assistant Commissioner and accepted by the Tribunal were Rs. 46,620. The total income of the two years on the basis adopted by the Tribunal was therefore Rs. 87,838. But the income of the two years was rounded off at Rs. 1,00,000 and divided equally between the two years. For making up a consolidated statement of account the Tribunal gave no reasons nor did it give any reasons " for debiting the intangible additions " of Rs. 15,000 and Rs. 6,000 against the cash credits. Counsel for the respondents suggested that the Tribunal was presumably of the view that Rs. 15,000 brought to tax as business income in the assessment in 1952-53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen urging his appeal in respect of the year 1953-54, to make a voluntary return for the year 1952-53 ; and even if the respondents carried out that undertaking, the assessment of 1952-53 could not be reopened otherwise than in the manner prescribed by law. The undertaking must therefore be ignored. Under section 33(4) of the Indian Income-tax Act, 1922, the Income-tax Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power conferred by that sub-section is wide, but it is still a judicial power which must be exercised in respect of matters that arise in the appeal and according to law. The Tribunal in deciding an appeal before it must deal with quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52-53 and another Rs. 50,000 in the year 1953-54. But this is only a superficial way of looking at the matter. In the assessment year 1952-53 the respondents were assessed in the status of a registered firm and the income of the firm had to be distributed amongst the partners, and the shares of the partners could be assessed to tax in their hands. The rate of tax on this income, unless the partners have large individual income, would be comparatively low. In the year 1953-54 the respondents were an unregistered firm and the total income of the unregistered firm was liable to be taxed. It was also contended that the arguments raised before this court were never set up either before the Tribunal or before the High Court and should not be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income for the year 1952-53. On the answer to the first question no further enquiry need be made on the second question. The Tribunal has given no reasons in support of the view that the "intangible additions" of Rs. 21,000 covered a part of the cash credits. Our attention has also not been invited to any evidence which establishes a connection between the cash credits of Rs. 21,000 and the additions of Rs. 15,000 made in the assessment for 1952-53 and Rs. 6,000 added in 1953-54. The fourth question contemplates an inquiry whether the Tribunal was justified in directing that the income under the head "business" for the assessment year 1953-54 be reduced to Rs. 50,000. The question is somewhat misleading. The direction of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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