TMI Blog1981 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 having been declared by the assessee in Part of the return, was the Tribunal right in law in holding that the provisions of section 27l(1)(c) were attracted in respect thereof ? " It appears that this reference relates to the assessment for the assessment year 1962-63. For this year the assessee filed a return on June 26, 1964, declaring a total income of Rs. 15,235. In Part F of the return the assessee showed a sum of Rs. 1,24,881 as receipt exempt from tax under s. 10(3) of the I.T. Act, 1961, being winnings from betting on horse races. The said winnings were stated to have been received through K. N. Chakraborty, proprietor of M/s. Taraknath Co., a concern of book-makers of the turf club. In the course of the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the payment of the horse race winnings of the assessee. Then the assessee was asked to appear to prove the same. But the assessee was unable to prove because the entries in the book-maker's account had not tallied with that of the assessee. In that context the ITO observed : " I hold that Rs. 1,24,881 is the income from undisclosed source and winning on horse betting is only a created one only to rise up to the occasion to explain away the real source of income." After completion of the assessment the ITO initiated penal proceedings against the assessee under s. 271(1)(c) and referred the matter to the IAC for further action. Before the IAC it was contended that the assessee's appeal disputing the above-mentioned addition in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has brought in his own unaccounted money from undisclosed sources into the books of account. Thus, there was clear concealment of income to attract the provisions of section 271(1)(c)." It appears, therefore, that so far as the assessee's explanation that Rs. 1,24,881 was not included in the total income as receipts from the winning on horse races is concerned, it was rejected. The assessee could not prove that there was any winning at all from the horse races. On the other hand from the totality of the evidence it appears that the said story of horse racing was created to explain the receipts of Rs. 1,24,881. There is no dispute that the returned income was less than 80% of the income assessed. Hence, the Explanation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recently taken a decision in the case of CIT v. Rupabani Theatres P. Ltd. in I.T Ref. No. 320 of 1973, the judgment in which was delivered on 18th September, 1980 ([1981] 130 ITR 747), reiterating the same principles. It has also been held that the evidence in assessment proceeding are not conclusive but they are good evidence which cannot completely be ignored. But in this case the totality of the evidence is that the assessee's certain incomes were not included in the return. It appears that he had claimed that this income was the winnings from betting on horse racing but he was unable to prove that. It was further held that the story of hors racing was set up as a device to explain the source of money. In that background the onus was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection reference may also be made to the observations of the Supreme Court in the case of Mansukhlal and Brothers v. CIT [1969] 73 ITR 546. So far as the hundi loans are concerned it has been held in respect of the quantum appeal in the judgment delivered by us that the additions were correctly upheld by the Tribunal on materials before the Tribunal. On the disclosure petition we have observed that the Commissioner was to find out whether such disclosure petition remained undisposed of in the quantum appeal and if such disclosure petition still remained undisposed of, then the Commissioner should dispose of the petition in accordance with law and as quickly as possible. If as a result of such disposal, relief is obtained, such relief is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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