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2007] 292 ITR 678 [2008] 169 TAXMAN 50 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. S. Kannaiyanï‚ ï-ª P.D. DINAKARAN AND P.P.S. JANARTHANA RAJA, JJ. T.C. APPEAL NO. 852 OF 2004 AND T.C.M.P. NO. 594 OF 2004 JANUARY 24, 2006 Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1992-93 - Assessee was connected with a firm - A search was conducted at premises of that firm wherein certain sum was seized - As firm was not able to furnish source of that sum, Assessing Officer treated that sum as undisclosed income and made individual assessments in hands of persons including assessee in whose names sum stood invested in banks - However, Tribunal held that since there were claims by public in respect of said amount, it was not proper to treat amount as income from undisclosed source of various assessees and directed Assessing Officer to examine all aspects of matter including criminal proceedings - Whether substantial question of law arose out of order of Tribunal - Held, no FACTS The assessee was connected with a concern firm which was being run by one 'P'. A search was conducted at premises of said concern and a huge sum was seized. As 'P' was not able to explain the source of deposits, the Assessing Officer treated the sum as undisclosed income and made individual assessments in hands of the persons including the assessee in whose names amount stood deposited in various banks. On appeal, the Commissioner (Appeals) upheld the order of assessment. On second appeal, the Tribunal held that when the amount could not be linked with the accounts of the firm, but such amounts were found in the names of various other persons, it would be necessary for such persons to offer explanation. The Tribunal also held that since there were claims by public in respect of said amount, it was not proper to treat the amount as income from undisclosed source of various assessees. The Tribunal, therefore, directed the Assessing Officer to examine all the aspects of the matter including the criminal proceedings. On revenue's appeal : HELD A perusal of the observations made by the Tribunal made it clear that none of the observations would…

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