1977 (4) TMI 58 - AT - Income Tax

Summary

Issues:
1. Addition of Rs. 15,000 as undisclosed income in the assessment year 1968-69.
2. Validity of the appeal by the IT Officer and cross objection by the assessee.
3. Interpretation of the voluntary disclosure made by the wife of the assessee under the Finance Act.
4. Application of the decision of the Delhi High Court in the case of Rattan Lal.
5. Assessment of income from undisclosed sources in the hands of the assessee.

Analysis:
1. The IT Officer added Rs. 15,000 as undisclosed income in the assessment year 1968-69, questioning the source of investment made by the wife of the assessee in a firm. The IT Officer was not satisfied with the explanation provided by the assessee, leading to the addition of the said amount as income from undisclosed sources.

2. The assessee filed an appeal, and the Assistant Commissioner of Income Tax (AAC) accepted the plea based on the voluntary disclosure made by the wife of the assessee under the Voluntary Disclosure Scheme. The AAC relied on the decision of the Delhi High Court in the case of Rattan Lal and deleted the addition made by the IT Officer.

3. The IT Officer appealed the decision of the AAC, arguing that the Delhi High Court's decision in the case of Rattan Lal should not have been relied upon. On the other hand, the assessee raised cross objections, contending that the addition of Rs. 15,000 was unwarranted and illegal as it pertained to a different accounting period.

4. The appellate tribunal confirmed the order of the AAC, stating that the decision of the Delhi High Court was binding in the territory of Delhi. The tribunal also found merit in the cross objection raised by the assessee, noting that the investment made by the wife of the assessee was traceable to an earlier accounting year and should not be assessed in the hands of the present assessee.

5. The tribunal concluded that the addition of Rs. 15,000 could not be upheld in the present assessment year or in the hands of the present assessee. The tribunal dismissed the appeal by the IT Officer and allowed the cross objection raised by the assessee, directing that the order of the AAC be confirmed.