TMI Blog1972 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 (the previous year being April 16,1960, to April 15, 1961) the Income-tax Officer found a cash credit entry in the sum of Rs. 20,000 dated April 7, 1961, in the name of Smt. Satyavati Devi, the wife of the assessee. The assessee could not explain the entry satisfactorily and the amount of Rs. 20,000 was added to the assessee's total income as income from other sources for the assessment year 1961-62 and subjected to tax. An appeal was taken before the Appellate Assistant Commissioner and it was contended on behalf of the assessee that the amount had been included in the computation of total income under the head " Other sources " and the previous year should have been the financial year and as the amount of Rs. 20,000 appeared in his books of account on April 7, 1961, if at all taxable, it should fall for consideration in the assessment year 1962-63 and not in the assessment year 1961-1962. The Appellate-Assistant Commissioner accepted the assessee's contention and deleted the said amount of Rs. 20,000 from the computation of the income-tax for the assessment year 1961-62 directing the Income-tax Officer to consider this amount in the assessment year 1962-63 after considering al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on Commissioner of Income-tax v. C. S. Shastri that a taxing statute must be construed strictly because no one was bound to pay more than what the law clearly required him to do and if the position was ambiguous the taxpayer was entitled to the benefit of that ambiguity, the Tribunal deleted the addition of Rs. 20,000 made in the assessment year 1962-63. At the request of the Commissioner of Income-tax the present reference has been made. Mr. S. C. Bhandari, learned counsel for the revenue, urged that the sum of Rs. 20,000 is not an income from regular business and, therefore, the assessee's previous year as opted by him under section 3(1)(b) should not be treated as his previous year but his previous year for this entry is as defined in section 3(1)(a) of the Income-tax Act. He further contended that the opted previous year was intended to cover regular business and did not relate to an undisclosed income. The reason is because an assessee was entitled to have different previous years for different sources of income. In this view of the matter section 68 of the Income-tax Act would not apply. He placed reliance on Commissioner of Income-tax v. P. Darolia Sons, Baladin Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his opted previous year under section 3(1)(b). The term " previous year ", has been defined in the Act. Let us read sections 3(1)(a) and 3(1)(b) : " 3. (1) For the purposes of this Act, 'previous year' means-- (a) the financial year immediately preceding the assessment year ; or (b) if the accounts of the assessee have been made up to a date within the said financial year, then, at the option of the assessee, the twelve months ending on such date..... " Generally, the financial year immediately preceding the assessment year is the previous year as covered by section 3(1)(a) but the assessee has been given an option by law under section 3(1)(b) to make up his accounts on the basis of a twelve-month period starting from any odd day of the year and in that case so far as the assessee is concerned it will be his previous year. We see no justification for giving a different connotation to the term " previous year " for the undisclosed income than the previous year which has been opted by the assessee and accepted by the department as the period for the purposes of computing his income-tax under section 68 of the Act. We feel fortified in our conclusion when we recall that u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of roping in such income to tax. It is trite but true to say that no tax can be levied on the subject without words of the Act clearly indicating an intention to lay a burden upon him. The citizen must come within the letter of the law and the argument that he falls within the spirit of the law cannot avail the department. Reference in this connection may be made to Duke of Westminster v. Inland Revenue Commissioners . We might notice in passing the cases cited by the learned counsel for the department. In Darolia's case the learned judges of the Patna High Court held that in respect of an amount of cash received during the accounting year the burden of proof was upon the assessee to show positively the source and nature of the receipt and in the absence of an adequate explanation the revenue authorities were entitled to draw the inference that the receipts were in the nature of income and liable to be taxed, and where the assessee had not adopted a system of accounting or opted for any previous year the only course open to the income-tax authorities was to take the financial year ending on 31st March. This case is clearly distinguishable. There was no system of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 68 of the Income-tax Act, 1961, and the learned judges observed : " It is, however, obvious that even under the provisions embodied under the new Act it is only when any amount is found credited in the books of an assessee that the section will apply. On the other hand if the undisclosed income was found to be from some unknown source or the amount represents some concealed income which is not credited in his books the position would probably not be different from what was laid down in the various cases decided when the Act was in force. " This is the passage on which Mr. Bhandari relies. We are unable to appreciate how in the circumstances of our case which we have detailed above, this passage is helpful to him. In Baladin's case the books of account did not contain the undisclosed income and the dates of their acquisition could not be located and, therefore, resort had to be taken to the financial year. That precisely is the principle enunciated in section 69 of the Act. We need not examine Jethmal Lakhani's case because it has been mentioned with approval by their Lordships in the above case, which we have already noticed earlier. No other point was pressed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
