High Court Of Delhi
CIT vs. Sujjan Singh Chadha
Sections 68, FA1965 (No. 2) 24(2)
Asst. Year 1967-68
D.K. Jain & Ms. Sharda Aggarwal, JJ.
IT Ref. No. 217 of 1977
11th July, 2002
Counsel Appeared : Ms. Prem Lata Bansal & Rajeev Awasthi, for the Revenue : None appeared, for the Assessee
D. K. Jain J.
The judgment of the Court was delivered by At the instance of the Revenue, the Tribunal (Delhi) has referred the following question, arising out of ITA No. 2150 (Delhi) of 1974-75, pertaining to the asst. yr. 1967-68, for the opinion of this Court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the cash credits of Rs. 19,692 in the account of Smt. Amrit Kaur in the books of the assessee for this year stood satisfactorily explained by the assessee in view of the disclosure made by Amrit Kaur under s. 24(2) of the Finance (No. 2) Act of 1965 ?”
There is no appearance on behalf of the assessee. We have, accordingly, heard Ms. Prem Lata Bansal, learned standing counsel for the Revenue. Briefly stated, the background facts are :
The assessee, an individual, carries on business in sugar mill machinery parts. The relevant previous year ended on 30th June, 1966. During the course of assessment proceedings for the relevant assessment year, the AO noticed a cash credit of Rs. 19,692 in the account of Smt. Amrit Kaur, the wife of the assessee, in the books of account maintained by the assessee. On being called upon to explain the source of said cash credit, it was explained that the said credit had come out of an earlier disclosure made by Smt. Amrit Kaur in terms of s. 24(2) of the Finance (No. 2) Act of 1965. Not satisfied with the explanation furnished by the assessee, the AO included the saidamount in the total income of the assessee. Being aggrieved, the assessee preferred an appeal to the AAC, who, relying on the decision of this Court in the case of Rattan Lal vs. ITO (1975) 98 ITR 681, deleted the saidaddition. The Department filed an appeal to the Tribunal but without any success. On being moved under s. 256(1) of the Act, the present reference has been made.
4. The issue raised is no longer res integra. In Jamnaprasad Kanhaiyalal vs. CIT (1981) 130 ITR 244, the Supreme Court, dealing with a similar question, has held that the legal fiction created by s. 24(3) of the Finance (No. 2) Act of 1965, was limited in its scope and could not be invoked in assessment proceedings relating to any person other than the person making the declaration under that Act so as to rule out the applicability of s. 68 of the Act. The Court has further observed that there is nothing in s. 24 of the said Act, which prevents the ITO, if he was not satisfied with the explanation of an assessee about the genuineness or source of an amount found credited in his books, in spite of its having already been made the subject-matter of a declaration by the creditor and taxed under the scheme, from investigating the true nature and source of the credits. It is pertinent to note that in view of the aforenoted decision, the decision of this Court in Rattan Lal’s case (1975) 98 ITR 681 (Mad) has since been overruled by the apex Court in ITO vs. Rattan Lal (1984) 145 ITR 183 (SC).
5. As noted above the addition made by the AO was deleted by the appellate authorities on the basis of thedecision of this Court in Rattan Lal’s case (1975) 98 ITR 681 (Mad). In the light of the aforenoted decision of the Supreme Court, the question referred has to be answered in the negative, i.e., in favour of the Revenue and against the assessee. We answer the question accordingly. There will be no order as to costs.
[Citation : 258 ITR 121]