TMI Blog1978 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... riod 11th November, 1958, and 5th March, 1959. The assessee failed to explain the genuineness of the credits to the satisfaction of the ITO. As the credits fell, according to the ITO, within the previous year relevant to the asssessment year 1960-61, the ITO treated the credits of Rs. 65,000 as the income of the assessee from undisclosed sources in the assessment year 1960-61. In appeal, the AAC did not accept the assessee's contention that the credits were genuine loans from the creditors. He took the peak of the credits at Rs. 55,000. He held that those credits could be taken into consideration only in the assessment year 1959-60 as the sum fell within the financial year 1958-59. The AAC came to this conclusion on the ground that s. 68 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue preferred an appeal against the order of the AAC by which he deleted the addition. The assessee also filed cross-objection challenging the affirmation of the reopening of the assessment. It was submitted before the Tribunal on behalf of the assessee that no income for the assessment year 1959-60 could be said to have escaped assessment. According to the assessee, under s. 297(2)(d)(ii) of the I.T. Act, 1961, the assessment could be reopened under s. 147 and the provisions of s. 68 would be applicable. It was argued that the credits appeared in the account books of the assessee in the accounting year ending on the 1st November, 1959, and could be considered only in the assessment of 1960-61 under s. 68 and not in the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that admittedly the assessee did not disclose the credits as its income in the return for the assessment year 1959-60, and according to the law that prevailed during the assessment year 1959-60 the credits could be considered only in the assessment year 1959-60 and not in the subsequent year. The Tribunal observed that neither s. 297(2)(d)(ii) nor s. 147 of the I.T. Act, 1961, had made any change with respect to the previous year for any assessment year for which the income had escaped assessment. According to the Tribunal s. 297(2)(d)(ii) had provided for making the assessment in accordance with the provisions of the Act and s. 68 would not at all come into play so far as the reopening of the assessment was concerned. The Tribunal further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und to make a true and full disclosure of all material facts for making the assessment of that year, and the income in question was income from undisclosed sources in that year. In that background, we have to examine the ratio of the decision of the Supreme Court in the case of Baladin Ram v. CIT [1969] 71 ITR 427. There the Supreme Court observed that it is now well settled that the only possible way in which income from an undisclosed source could be assessed or reassessed or to make the assessment on the basis that the previous year for such income would be the ordinary financial year. Even under the provisions embodied, according to the Supreme Court, in s. 68 of the I.T. Act, 1961, it is only when any amount was found credited in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act, 1961, is in the following terms : 68. Cash credits.--Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. " Under s. 297(2)(d)(ii), after the repeal of the Indian I.T. Act, 1922, any income chargeable to tax which had escaped assessment within the meaning of that expression in s. 147 and where no proceedings under s. 34 of the repealed Act in respect of any such income were pending at the commencement of the 1961 Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary for us to decide for the purpose of this case whether s. 68 is a substantial provision or merely procedural. We are, however, inclined to think that it affects in certain cases substantial rights but we need not rest our decision on this aspect of the matter. We agree with the Tribunal that cls. (h) and (k) have no application to the controversy. As we have indicated above, there is no challenge to the finding of the Tribunal that this was income from undisclosed sources. This is a finding which is unchallenged. Such a finding, therefore, cannot be gone into in this reference : See CIT V. Kamal Singh Rampuria [1970] 75 ITR 157 (SC). In that view of the matter and in view of the fact that the financial year must be considered to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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