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Section 251 of the Income-tax Act, 1961 [Corresponding to section 31 of the Indian Income-tax Act, 1922] - Commissioner (Appeals) - Powers of - Assessment year 1957-58 - AAC while deleting addition of certain sum made by ITO in assessment for assessment year 1957-58, observed that said sum represented income from an undisclosed source relatable to assessment year 1956-57 - Whether while dealing with propriety of assessment for assessment year 1957-58, AAC's finding that said sum did not relate to that year was sufficient to dispose of that item and AAC was not competent to give a finding that said sum was assessable in year 1956-57 - Held, yes FACTS For the assessment year 1957-58, the ITO made an addition which included certain sum introduced in the head office cash book in November, 1955. On appeal, the AAC deleted the addition of said sum on the ground that the said sum was outside the financial year 1956-57, relevant the assessment year in question. He further observed that the same represented income from an undisclosed source for the assessment year 1956-57. On further appeal, the Tribunal held that the AAC was not competent to give the finding that the said sum was assessable in the year 1956-57. On reference HELD In the instant case the AAC was dealing with the propriety of the assessment for the assessment year 1957-58. He found that the said sum did not relate to that year. That finding was sufficient to dispose of the item. He could not record a definite finding that this very item represented income of the assessee from an undisclosed source for the assessment year 1956-57. The Tribunal was right in reversing the decision of the AAC on this point and in holding that the AAC was not competent to give finding that the sum was assessable in the year 1956-57. Note : The case was decided in favour of assessee. CASES REFERRED TO Hazari Lal v. ITO [1960] 39 ITR 265 (All.) and ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 ; [1964] 6 SCR 411 (SC). JUDGMENT V.G. Oak ,CJ.-This is a reference under section 66 of the Indian Income-tax Act, 1922. The assessee is a registered firm. Its main business is of forest contracts. The assessment year was 1957-58 ; the…

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