TMI Blog1960 (3) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... 1945-46. For that assessment year, the previous year of the assessee in respect of his income from cloth business was from 4th July, 1943 to 26th June, 1944. The sum of ₹ 9,800 referred to in the question appeared as a credit in a suspense account in the account books of the cloth business. The assessee, when called upon to disclose the source of this sum, failed to give a satisfactory explanation and, that explanation having been rejected, the Income-tax Appellate Tribunal held that this sum of ₹ 9,800 was income of the assessee from some undisclosed source. Thereafter the Tribunal proceeded to hold that, since this amount had been entered in the account books of the cloth business as a cash credit account, it could not be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the known ones and, consequently, it would exclude the view that the source was the cloth business itself. In the books of account of the cloth business there were no entries of any transactions which might have resulted in this amount being earned as income from any undisclosed source. The entry in the books of account of the cloth business merely evidenced the fact that income from that undisclosed source was introduced into the cloth business by making the entry in the suspense account. The entry, therefore, at best, only evidences the disposal of income from an undisclosed source by using it in the cloth business. That entry is, in no respect, an entry of accounts in respect of the income from that undisclosed source. The view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of this undisclosed source. Section 2(11)(i)( a) of the Income-tax Act in effect lays down that, ordinarily, the previous year shall be the financial year next preceding the assessment year and it is only if the two particular conditions are satisfied that a different period can form the previous year. The two conditions are that the account books should have been made up for that separate source of income for a different period and, secondly, the assessee should have exercised the option of that period being treated as his previous year. We have already indicated above that, in the present case, there is nothing to show that the accounts in respect of this undisclosed source of income were made up for a period different from the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
