Law:

Section:

Articles 226 and 227 of the constitution of india-Writ-Maintainability of-Petitioner's account books showed large credit balance in the account of one r who had died, which remained unclaimed by his heirs-ITO included such credits as income from undisclosed sources on appeal, AAC allowed set of-Of losses of earlier years as claimed by petitioner-When department initiated recovery proceedings and attached his property, petitioner applied for settlement stating that certain sums standing to R'S credit which had become time barred in assessment years 1965-66 to 1967-68 may be taxed as cessation of trading liability under section 41(1) subject to certain conditions-Commissioner accepted offer for settlement but not petitioner's conditions -Pursuant to which/petitioner filed returns of income offering such amounts to tax ITO completed assessments and also deleted additions made for assessment year 1961-62-petitioner s appeals for assessment year 1965-66 were dismissed by AAC and tribunal-Whether, at that stage, petitioner could resile from earlier stand and contend in writ proceedings that assessment of impugned amounts as cessation of trading liability was without jurisdiction-Held, on facts, no-Whether, in fact, such assessment patently lacked jurisdiction-Held, no Section 41(1) of the income tax act, 1961-Remission or cessation of trading liability-Whether, in view of facts mentioned under 'writ-Maintainability of', impugned amounts were rightly assessed as cessation of trading liability-Held, on facts, yes Facts In the account books of the petitioner, a broker and dealer in shares, the ITO found a large credit balance in the account of one R who had died during the relevant previous year and with whom the petitioner had dealings in shares and debentures. Most of the credit entries in this account were made after his death and were on account of shares purchased from him. The ITO included the credits as income from undisclosed sources of the petitioner for the assessment year 1961-62. On appeal by the petitioner, the AAC directed the ITO to allow the petitioner's claim for set off of losses incurred in earlier years. In the meantime, the department initiated…

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