1990-VIL-524-P&H-DT

Equivalent Citation: [1991] 189 ITR 320, 102 CTR 346, 60 TAXMANN 37

PUNJAB AND HARYANA HIGH COURT

Date: 14.11.1990

COMMISSIONER OF INCOME-TAX

Vs

PREM CHAND JAIN

BENCH

Judge(s)  : G. S. CHAHAL., G. C. MITTAL 

JUDGMENT

The judgment of the court was delivered by

GOKAL CHAND MITAL J. -This order will dispose of five Income-tax References Nos. 65 to 69 of 1978, relating to the same assessee, in which the Income-tax Appellate Tribunal has referred the following common question for opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding for the assessment years 1967-68 to 1971-72, that past intangible additions made in the case of the firm and allocated to the assessee's share could be taken into account in considering the unexplained investments of the assessee and these would also be available for set off purposes in respect of the agreed additions for low household expenses made in the five years under consideration

The Income-tax Officer, while framing the assessments relating to the five assessment years, made additions of Rs. 22,804. Rs. 21,312, Rs. 36,034, Rs. 6,463 and Rs. 4,461, on account of low household expenses, interest income, unexplained costs of construction of house and other unexplained investments and costs. Out of the additions made, the addition made on account of low household expenses was agreed to by the assessee but not the other additions.

Feeling aggrieved, the assessee went up in appeal before the Appellate Assistant Commissioner, who deleted all additions except Rs. 75 for the first assessment year by giving set off in view of the additions made in the case of the firm of which the petitioner was a partner.

The Revenue went up in appeal before the Income-tax Appellate Tribunal, Amritsar, against the order of the Appellate Assistant Commissioner. The Tribunal followed the decision of this court in CIT v. Ram Sanehi Gian Chand [1972] 86 ITR 724, and came to the conclusion that the assessee was entitled to take advantage of the past intangible additions to explain the source which was considered by the Income-tax Department as income from undisclosed sources and after setting aside the order of the Appellate Assistant Commissioner sent back the matter to the Appellate Assistant Commissioner to examine the question of intangible additions afresh keeping in view the rival contentions of the parties. Even before the Tribunal, the question was whether he was entitled to set it off in the subsequent assessment years. On these facts, the Tribunal has referred the question quoted in the opening part of the judgment for opinion of this court.

Counsel for the Department wanted to argue in the first instance that once the assessee had agreed to the addition on account of household expenses, the same could not be deleted. There is an obvious fallacy in the argument because, even now, the assessee is not disputing the additions on account of low household expenses but the argument on his behalf is whether the past intangible additions made in the case of the firm and allocated to the assessee's share could be taken into account in considering the unexplained income and thus would be available to the assessee for set off in respect of the agreed additions for low household expenses in regard to the five assessment years under consideration. Accordingly, in view of the decision of this court in Ram Sanehi Gian Chand's case [1972] 86 ITR 724, and the decision of the Supreme Court in Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457, the Tribunal was right in remitting the case to the Appellate Assistant Commissioner to decide the appeal afresh keeping in view the dictum of law laid down in the said two decisions.

The question is thus answered in favour of the assessee, that is, in the affirmative, and against the department, leaving the parties to bear their own costs.

 

 

 

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