Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment years 1958-59 and 1960-61 - Assessee, a partner in firm, made gifts by means of transfer entries in firm's books - Interest accruing on amounts gifted was credited in accounts of donees and assessment for relevant assessment years were completed by allowing interest payment to donees - Subsequently, on basis of Tribunal's order in respect of assessment year 1954-55, that since no cash passed to donees, gifts were imperfect and inchoate and, therefore, interest amounts were assessable in assessee's hands, ITO initiated reassessments proceedings and included interest amount in assessee's income - Tribunal did not take different view on ground that it was bound by its previous decision - Whether fact that in earlier proceedings Tribunal took different view of gifts was not conclusive circumstance, and Tribunal's decision reached in those proceedings did not and could not in law operate as res judicata - Held, yes - Whether merely because cash had not passed on to donees on date gifts were purported to be made would not in any way detract either from validity or from perfection of gifts in question - Held yes - Whether, therefore, interest credited to donees account was incorrectly included in assessee's total income - Held, yes FACTS The assessee, a partner in a firm, made three gifts by means of transfer entries in the firm's books of account. The interest accruing on the amounts gifted were credited in the accounts of the donees and a claim for allowance of interest was made for the first time in the assessment year 1954-55. The ITO as well as the AAC disallowed the assessee's claim. Pending appeal before the Tribunal, the assessments for the relevant assessments years were completed and the interest paid to the donees were allowed. Subsequently, following the Tribunal's order in relation to assessment year 1954-55 wherein it was held that since no cash passed to donors, the gifts were imperfect and inchoate and, therefore the amounts of interest were assessable in the assessee's hands, the ITO initiated reassessment proceedings under section 147(a) and included the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492