Law:

Section:

SECTION 256(2) OF THE INCOME-TAX ACT, 1961 - REFERENCE - QUESTION OF LAW - ASSESSEE MADE INVESTMENT IN PURCHASE OF PICK-UP VAN AND DID NOT DISCLOSE SAID FACT IN RETURN - TRIBUNAL HELD REOPENING OF ASSESSMENT UNDER SECTION 147(a) VALID AS ASSESSEE HAD. NOT DISCLOSED FULLY AND TRULY NECESSARY FACTS - WHETHER ANY QUESTION OF LAW AROSE FROM TRIBUNAL'S DECISION - HELD, YES SECTION 256(2) OF THE INCOME-TAX ACT, 1961 - REFERENCE - QUESTION OF FACT - ASSESSEE CLAIMED TO HAVE BORROWED CERTAIN SUM FROM LADY RELATIVE TO MAKE REPAYMENT OF LOAN - TRIBUNAL HELD THAT ASSESSEE HAD REPAID OUT OF HIS INCOME FROM UNDISCLOSED SOURCES SINCE SAID LADY WAS NOT IN POSITION TO ADVANCE SAID SUM - WHETHER TRIBUNAL'S FINDING WAS ESSENTIALLY ONE OF FACT AND NO QUESTION OF LAW AROSE FROM ITS ORDER - HELD, ON FACTS, YES Facts In the previous year relevant to the assessment year under consideration, the assessee had invested a certain sum in the purchase of a pick-up van. The investment included a loan of a certain amount from a bank. The assessee filed income-tax/wealth tax returns on the same date. The factum of investment having been made in the pick-up van was not disclosed in the income-tax return, but the assessee did disclose it in the wealth-tax return. The assessee claimed that he had made a full and true disclosure within the meaning of section 147(a) on the ground that there was no particular mode of disclosing such investment under the Act. The Tribunal held that the ITO was fully justified in reopening the assessment under section I47( a). The assessee repaid the loan taken from the bank and claimed that for making the said repayment, he had borrowed the money from his sister-in-law. The Tribunal held that the repayment of the loan had been made by the assessee out of his income from undisclosed sources, since the said lady was not in a position to advance the sum to the assessee. On reference : Held A decision on the first point would require consideration of the following issues : (i ) whether there was any legal requirement for the assessee to disclose the investment made in the pick-up van for the relevant year, (ii) whether disclosure made in the wealth-tax return was…

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