Law:

Section:

Section 24 of the Finance Act, 1965 - Voluntary Declaration of Income - Whether protection is provided to detection of declarants' own income - Held, yes - Whether under section 24(4) protection is provided to detection of declarants' on income - Held, yes - Whether declaration made under section 24(2) must relate to income actually earned by declarant and department is not prevented to bring escaped income of non-declarants to assessment by reopening their closed assessments - Held, yes - Only during secrutiny, it was revealed that assessee's business was financed in an earlier year by hundi loans - Though lenders were assessed ITO sought to taxed assessee's escaped income for relevant year - Whether where assessee made false declaration at previous stage which was subsequently exposed, department could not be prevented from bringing escaped income of petitioner to tax and assessee could not said plea of double taxation - Held, yes FACTS During the course of assessment, for the assessment year 1961-62. It was noticed in scrutiny that the business of assessee was financed by money introduced in the form of hundi loans of Rs. 90,000 introduced during the assessment year 1957-58, from 20 Multani Brokers. These Multani brokers made declarations under section 24 declaring an amount of Rs. 90,000. they declared that the amounts were paid to the petitioner and utilised by him. These declaration were assessed and taxed ITO sought to reopen the assessee's assessment the ITO finalized the assessments by adding the aforesaid amount and the interest thereon to the income of the assessee. The assessee's appeal before the Act succeeded. On the Revenue's appeal before the Tribunal the assessee contended, the revenue having once accepted the position that the amount declared by the above named five persons, under the provisions of section 24 was the income of those five persons, it was not now open to it to resile from that position and to hold that those declared amounts were the undisclosed income of the assessee. The Tribunal rejected the contentions of the assessee and upheld the addition. On reference : HELD The Scheme of the Act makes it abundantly clear that it was to…

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