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TMI Blog1972 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,518. When the assessment proceedings were pending, the Income-tax Officer came to know of the fact that the assessee was found in possession of 2,000 tolas of gold and that in the month of February, 1957, the Central Excise authorities had seized the said gold as contraband. On the basis of the said information the Income-tax Officer examined the assessee on the 3rd of March, 1958, and asked the source of money for the purchase of the said gold. It is relevant to state that the assessee is not a dealer in gold. When questioned by the Income-tax Officer, the assessee told that he had purchased the gold for the first time on 2nd or 3rd February, 1957, for Rs. 1,80,000 from a broker in Calicut, that he had borrowed a sum of Rs. 1,75,000 from Bombay Multanis through a broker by name Gangaram. He offered to furnish their addresses. Thereafter, the Income-tax Officer called upon the assessee to furnish the details of his borrowings from which he had purchased the gold in question. In answer to that the assessee filed three statements, annexures 'A', 'B' and 'C' to the statement of the case, showing the particulars of the amounts borrowed, the persons from whom they were borrowed thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the gold with his own money from undisclosed sources and consequently added a sum of Rs. 1,80,000 as income from undisclosed sources. The assessee then preferred an appeal to the Appellate Assistant Commissioner. He rejected the assessee's contention that the proceedings do not fall within the purview of section 147(a) of the Act. However, he set aside the assessment and remitted the case back to the Income-tax Officer to make a fresh assessment in accordance with law after placing before the assessee all the materials which had been gathered or which may be gathered and allow a reasonable opportunity of rebutting the case against him. The assessee not being satisfied with the said order preferred I.T.A. No. 32/12 of 1966-67 before the Income-tax Appellate Tribunal, Madras Bench A. The Tribunal on examination of all the materials of the case came to the conclusion that they do not find any omission or failure on the part of the assessee and he had disclosed fully and truly all the material facts necessary for the assessment for the year under consideration in the original assessment proceedings. The substance of the findings of fact by the Tribunal are: (a) that all materials a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts necessary for his assessment for the relevant year " has been laid down by the dictum of the Supreme Court in the leading case of Calcutta Discount Co. Ltd. v. Income-tax Officer". The Supreme Court has not in any subsequent case departed from the law as laid down in the Calcutta Discount Company's case. The principles laid down therein were applied to the facts and circumstances of each case as they arose and the cases were decided. In Calcutta Discount Company's case that is what the Supreme Court has stated: " The words used are 'omission or failure to disclose fully and truly all material facts necessary for his assessment for that year'. It postulates a duty on every assesses to disclose fully and truly all material facts necessary for his assessment. What facts are material and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on February 12, 1946, on a total income of Rs. 78,556 which, on appeal, was reduced to Rs. 53,153. When the assessment proceedings of the assessee were pending before the Income-tax Officer, Trichy, that Income-tax Officer received information from the Income-tax Officer, Erode, that the mortgagor had paid secretly to the mortgagee a sum of Rs. 1,50,000 during the year ended on April 1, 1944, and that the same was not included in the compromise decree. When the Income-tax Officer asked the assessee about the same, he denied having received any amount secretly. Apart from the information conveyed by the Income-tax Officer, Erode, the assessing officer had no other material before him to show that any amount had been paid secretly by the mortgagor to the mortgagee. Hence, on May 27, 1945, the Income-tax Officer made the following note in the order sheet : 'It is denied that there was any secret understanding not to show the payment of Rs. 1,50,000. The receipt of this amount is entirely denied... The Income tax-Officer, Erode, should be asked to give further details and to ask the pattayagar to produce evidence of the payment. In any event this should come up for consideration onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emarks must be treated as casual observations and not a decision taken on the basis of facts found." Shri S. R. Rajasekhara Murthy, learned counsel for the department, placed strong reliance on the above passage in support of his contention that the fact that the Income-tax Officer in the original assessment proceedings could have made further enquiry into the question of the genuineness of the borrowings for the gold purchase, but that fact did not take the case out of section 147(a) of the Act. In our opinion, on the facts found by the Tribunal, the instant case is clearly distinguishable from Chidambaram Chettiar's case. It has to be noted that the Supreme Court came to the conclusion that no decision was taken on the basis of facts found in the original assessment proceeding regarding the receipt of Rs. 1,50,000. The observations in Chidambaram Chettiar's case have to be understood in the light of the clear principles enunciated by Chief Justice Shah in Commissioner of Income-tax v. Burlop Dealers Ltd. : " Mere production of company's account books or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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