Law:

Section:

Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1955-56 - Assessee was carrying on business of commission agency on sale and purchase of silver bars - ITO issued a notice under section 148 to assessee on ground that there had been income escaping assessment for assessment year in question in as much as assessee had sold certain silver bars to two parties but did not mention name of party from whom it had purchased those bars and that, this transaction was not carried through trading account and no commission was charged on sale of those bars - Whether ITO had relevant materials wherefrom he could reasonably believe that income in shape of introduction of those silver bars and profit on their sale had escaped assessment - Held, yes - Whether therefore it could not be said that impugned notice was without jurisdiction - Held, yes FACTS The assessee-firm was carrying on business, inter alia, of commission agency on the sale and purchase of silver bars. It was duly assessed to income-tax for the assessment year 1955-56. Consequent upon an external information and the examination of the cash books of the firm, it transpired that the assessee had concealed income in relation to the transaction of the purchase and sale of 22 silver bars, which were sold for Rs. 97,087,110 that the assessee had mentioned in his books of account the sale of these silver bars to two firms, but it had not entered in the account books the name of the party from whom it had purchased these 22 silver bars. In the next place, the assessee-firm had not entered the transaction of the purchase and sale of these 22 silver bars in the trading account relating to silver. In the third place, there was no entry in the books of account about the commission which the firm might have charged in respect of the sale of these silver bars. The assessee had been called upon to explain the significance of these entries and omission therefrom, but they did not do so in spite of several opportunities. On those facts the ITO believed that these 22 silver bars actually belonged to the assessee, which it kept outside the books of account and entries had…

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