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2007] 292 ITR 673 [2008] 170 TAXMAN 511 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. K. Chinnathambi P.D. DINAKARAN AND P.P.S. JANARTHANA RAJA, JJ. T.C. NO. 680 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 which failed to explain source of certain deposits - Assessing Officer treated those deposits as undisclosed income and held that onus of proving source of deposits primarily rested on persons in whose names deposits appeared in various banks and, accordingly, made individual assessments in hands of those persons including assessee - Commissioner (Appeals) upheld order of assessment - However, Tribunal held that since there were claims by public, it was not proper to treat amounts as income from undisclosed source of assessee and others and directed Assessing Officer to examine all aspects of matter including criminal proceedings initiated by depositors against firm - Revenue filed appeal against order of Tribunal - Whether since none of observations of Tribunal would affect interest of revenue and no substantial question of law arose out of order of Tribunal, appeal filed by revenue was liable to be dismissed - Held, yes FACTS The assessee was connected with a firm. As 'P', the person running that firm, was not able to explain the source of certain deposits, the Assessing Officer treated the same as undisclosed income. In the course of assessment proceedings of some of the colleagues of 'P', the Assessing Officer held that the onus of proving the source of deposits primarily rested on the persons in whose names deposits appeared in various banks and, accordingly, the Assessing Officer made individual assessments in the hands of those persons including the assessee. On appeal, the Commissioner (Appeals) upheld the order of assessment. On further appeal, the Tribunal held that wherever amounts could not be linked with the accounts of the concern, but such amounts were found in the names of various other persons, it would be necessary for such persons to offer Explanation. The Tribunal, however, held that since there were claims by public, it…

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