TMI Blog2002 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant assessment years while submitting the return and furnishing information. - For the reasons aforesaid, I refuse to entertain these writ petitions and accordingly, dismiss the same. - - - - - Dated:- 8-8-2002 - Judge(s) : BARIN GHOSH. JUDGMENT BARIN GHOSH J.-These writ petitions were heard analogously inasmuch as the facts relating thereto and law applicable in relation to the same are almost identical. The subject-matter of challenge in C.O. No. 4959(W) of 1989 is the notice dated March 28, 1989, issued under section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"), for the purpose of re-opening the assessment for the assessment year 1981-82. In C.O. No. 4960(W) of 1989 the subject matter of challenge is a similar notice dated March 28, 1989, for reopening the assessment for the assessment year 1980-81. In C.O. No. 4961(W) of 1989 the subject matter of challenge is a similar notice also dated March 28, 1989, for reopening the assessment for the assessment year 1973-74. The grounds upon which power under section 148 of the said Act has been exercised are identical and the same are as follows: "THE PEERLESS GENERAL FINANCE AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come exceeding Rs. 50,000 has escaped assessment in the following respects as a result of inadequate and incorrect statements, misleading actuarial certificate, wrong basis of calculation and suppression of relevant facts; (a) Income from forfeiture of lapsed certificate. (b) Profit under section 41(1) of the Income-tax Act as a result of cessation of liability already claimed as 'interest and bonus accrued'. (c) Excess deduction claimed under the head, 'Interest and bonus accrued', at a fixed percentage of the Social Welfare Scheme Fund on the ground that the fund was in excess of the requirement. (d) Excess deduction claimed under the head, 'Interest and bonus accrued', at a fixed percentage of the balance in the said fund on the ground that such percentage was in excess of the amount allowable on accrual basis. (e) Deduction claimed under the head, 'Provision for refund of subscription' on the strength of wrong actuarial advice. 4. In the circumstances stated above, I have reason to believe that by reason of the omission and failure on the part of the assessee, the Peerless General Finance and Investment Co. Ltd., to disclose fully and truly all material facts neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would alone be reflected under the heading "Social Welfare Scheme Fund". If the auditor's report shows that the fund shown in the liabilities side of the balance-sheet under the heading "Social Welfare Scheme Fund" is more than the liability of the petitioner, in fact, towards its depositors, that clearly demonstrates that apart from the monies belonging to such depositors, some other monies are also lying in the said fund and shown as liability. This is not possible. Any fund received by the petitioner by way of deposit would be reflected in the balance sheet of the petitioner in the liabilities side as funds lying in the "Social Welfare Scheme Fund" and the cash received would be reflected in the assets side as "cash" available to the petitioner. If the liability is, in fact, less than what has been shown in the liabilities side, that would mean an income which should have been reflected in the profit and loss account, has not been so reflected and has been shown as liability in the balance sheet. Though such reflection is surely for the year considered by the auditor, having regard to the report of the auditor annexed to the affidavit-in-reply, to the effect "The liability to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner used to treat a substantial portion of the first year's deposit by an individual depositor as its income and used to show the same in the profit and loss account. The balance used to be shown in the Social Welfare Scheme Fund in the liabilities side of the balance-sheet. The money representing the liability on account of the Social Welfare Scheme Fund used to be invested by the petitioner and the earnings thereon used to be apportioned in between the petitioner, towards its income, and remaining towards liability on account of the Social Welfare Scheme Fund. Therefore, during the relevant assessment years, income on such deposits used to be shared between the petitioner and the depositors. The share of the petitioner used to be reflected in the profit and loss account as income of the petitioner and the share of the depositors used to be added to the Social Welfare Scheme Fund in the liabilities side of the balance sheet of the petitioner. The deposits of the depositors, who could not meet their contractual obligation to deposit the amount mentioned in the contracts for the periods in question, used to be forfeited by the petitioner. Such forfeited amount used to be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o forfeit all the lapsed certificates liable to be forfeited in strict terms. The amount of subscription actually forfeited in any particular year was debited to the said fund and credited to the profit and loss account of the said year. It is relevant to point out here that the amount so forfeited although credited to the profit and loss account is in law and in reality not a revenue receipt of the petitioner-company but a capital receipt. Your petitioner therefore states that the amount of a lapsed certificate does not become income until it is actually forfeited. The surrender value of a certificate is always less than the total subscription paid up to the date of surrender. Therefore, in case of surrender of any certificate there is a surplus arising to the petitioner-company being the difference between the total subscription paid by the subscriber and the surrender value payable to him. Such surplus was treated as revenue income in the year of actual surrender and taken to the profit and loss account of that year under the heading 'Surplus on Surrender'." It has, therefore, been admitted in the petition that an income accrued in a particular year was not shown either in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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