Law: Income Tax Act, 1922

Section: 23(3)

(a) Income-tax- - Loss-Assessee's duty to reconcile figures shown in return or prove that receipts and expenses shown in original return of income, were incorrect and necessitated revision of return of income-In absence of any explanation to that effect. Income-tax Officer, held, has no alternative but to hold that revised figures of loss were fictitious and to proceed on basis of receipt and expenses not stated by assessee to be incorrect at any stage. (b) Income-tax Act (XI of 1922)--S. 23 (3)-Assessment-Ascertainment of availability of funds for investment-Income-tax Officer making specific query whether build­ing and machinery value of which shown in wealth statement still in his possession or disposed of-Assessee simply stating that no factory or building standing in his name and that whereabouts of owners of godown used by him, not known-Such `explanation', held, no `expla­nation' bringing heavy responsibility on assessee to explain capital investment. ORDER GULAM MURTAZA KHAN (MEMBER).-In these cross-appeals relating to the assessment year 1977-78, the assessee-appellant has disputed the validity of the assessment order. He has also disputed certain additions confirmed in the appeal by the Commissioner of Income-tax (Appeals). The Department, on the other band, has objected to the deletions made by the learned Com­missioner of Income-tax (Appeals) of additions of cash credit and unproved loan obtained from wife and others. The two appeals arise out of common questions of facts and hence the same are disposed of by a combined order. 2. The assessee-appellant is an individual and derived income from ship-breaking, interested and share income form a registered firm. The objec­tions of the appellant concern the ship-breaking business only. The return of income was filed by the appellant on 1st October, 1977, showing income from the following sources :- . Rs. (a) Income from N. A. Industries, a sole proprietary concern 40,000 (b) Share of loss from Messrs Tonocraft 3,842 (c) Income from interest 23,158 Total 59,316 3. This statement was not supported by any statement of accounts but pursuant to notice issued by the Income-tax Officer under sections 23 (2) and…

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