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TMI Blog1971 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of his wife at Rs. 6,87,527. Out of this Rs. 2,00,502 was agreed to be spread over a period of six years, from the assessment year 1939-40 to the year 1944-45 and the balance of Rs. 4,87,025, to be distributed equally over a period of five years from 1945-46 to 1949-50. It was further agreed that the total income including the disclosed income and the total demand including the excess profits tax due for each of the years 1945-46 to 1949-50 would be as follows : Total income I. T. Total demand E. P. T. Rs. Rs. Rs. 1945-46 1,22,845 28,700-6-0 51,442-11-0 1946-47 2,23,731 46,815-3-0 1,22,961-5-0 1947-48 1,43,786 61,670-1-0 26,203-5-0 1948-49 1,20,842 63,419-15-0 1949-50 3,02,287 70,394-11-0 ------------------- ----------------------- Rs. 2,71,099-4-0 (?) Rs. 2,01,907-5-0 (?) ------------------- ----------------------- There were also other terms regarding penalty, mode of payment of the tax provision for security, etc. In accordance with the aforesaid agreement reassessments for the years 1945-46 to 1949-50 were made under section 34 of the old Act. On the 27th March, 1956, the assessment for the year 1951-52 was made under section 23(3) on a total income of Rs. 90,139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 12th July, 1965, the application under article 226 of the Constitution was dismissed. An appeal was preferred from the order of dismissal. By an order of the court of appeal dated the 1st July, 1966, the appeal was allowed, a rule was issued in terms of the prayers of the petition and the trial court was directed to hear the rule. As the affidavit-in-opposition originally filed was found to be unsatisfactory, a, further affidavit was affirmed by the respondent, Income-tax Officer, pursuant to a direction by this court on the 5th March, 1969, to be used in opposition to the petition. In this affidavit the substance of the reasons supplied to the petitioner was further explained and a copy of the proposal for re-opening the assessment of the petitioner for the years 1946-47 to 1950-51 under section 147(a) was annexed. The reasons given for reopening the assessment were shortly as follows : (1) The Income-tax Officer came to learn that the petitioner had a fixed deposit account with the National Bank of India Ltd. in which the following deposits had been made : Date Amount Relevant assessment year Rs. 7-1-1950 3,00,000 1950-51 24-1-1950 50,000 1950-51 25-2-1950 50,000 1950-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further contended that none of these amounts appear to have been considered in the petitioner's assessment for the relevant assessment years and considering the magnitude of the amounts in the background of the petitioner's assets and/or disclosed income for the various years the presumption is inevitable that these amounts and deposits represent the accumulated profit of the petitioner for at least five previous years. It is not quite correct to say that the aforesaid amounts were not considered for the assessment of the petitioner in any year. As I have already pointed out, attempts were made to include these amounts in the assessment of the petitioner for the assessment year 1951-52 which was ultimately set aside by the Commissioner of Income-tax under section 23A with a direction to the respondent, Income-tax Officer, to write to the petitioner asking him to explain the three deposits of Rs. 5,70,500, Rs. 2,58,750 and Rs. 7,76,250 in the Netherlands Trading Society in July, 1950, as also the remittance from Pakistan of an amount of Rs. 3,14,403 and a further remittance of Rs. 5,33,750 from Pondicherry and requiring him to show cause why these amounts should not be assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1950-51, but no explanation was forthcoming. In his affidavit-in-opposition the Income-tax Officer has stated that in view of the magnitude of the amounts in deposit taken in the bank account of the assessee and/or disclosed income of the earlier years as well as the disclosed assets of the petitioner, the amounts must be taken to represent the accumulated profits of at least five previous years. The learned counsel submits that this would bring the present case within the ratio of Kantamani Venkata Narayana's case. It is submitted that the various deposits in the different banks mentioned in paragraphs 4, 5 and 6 of the affidavit-in-opposition would amount to about Rs. 17,00,000. So, it was not unreasonable for the Income-tax Officer to believe that this accumulation represented the assessee's undisclosed income for five or more years. In Kantamani's case the Supreme Court observed as follows : " From the affidavit of the Income-tax Officer it clearly appears that there had been considerable increase since 1938 in the investments in the money-lending transactions of the assessee and in the wealth of the assessee. The Income-tax Officer was not seeking to reassess the income on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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