TMI Blog1980 (8) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner, for the first time, filed his income-tax return for the assessment year 1975-76. His return disclosed income from business at Rs. 6,100. The ITO estimated his income at Rs. 7,000. The petitioner-assessee also showed a capital investment of Rs. 20,000 in the name of his minor sons in a firm, M/s. Santosh Bombay-Dyeing Show-room, Davangere. He explained the source of his capital outlay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained source for the relevant assessment year 1975-76. Aggrieved by the assessment order, the petitioner preferred a revision under s. 264 of the I.T. Act to the Commissioner of Income-tax, Karnataka, respondent No. 1 herein. The Commissioner disposed of the revision petition rejecting the same, observing-as follows: " Thus there is a gap of two years between the withdrawal of the pigmy a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was open to the petitioner to use or not to use the bank facilities. It is, therefore, contended that the Commissioner did not judicially exercise the discretion vested in him under s. 264 of the I.T. Act but proceeded to pass, the order on a capricious surmise as to what a person should or should not do with the money he had obtained. As against this, the learned counsel for the revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation as not believable for the reason that on his investigation no such pigmy deposit was ever made in the bank. In the alternative he ought to have called upon the assessee-petitioner to substantiate his claim by documentary evidence. Having exercised neither of the choices, it was not open to the ITO to merely surmise that it would not be probable for the assessee to keep Rs. 15,000 un-utilise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner and the ITO are set aside. Liberty is reserved to the ITO to call upon the petitioner to substantiate his assertion as to the source of Rs. 15,000 which he utilised as capital outlay in the year 1975, and to pass a fresh assessment order in accordance with law. Rule will accordingly issue and be made absolute. There will be no order as to costs. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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