Law:

Section:

Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment years 1945-46 to 1948-49 - Whether conditions necessary for attracting provisions of section 34 of 1922 Act must be satisfactorily established and burden to establish same is on assessing authority - Held, yes - Whether said burden on department would be discharged where explanation for particular item in accounts be shown to be unsatisfactory - Held, yes - Whether once rejection of explanation be treated as sufficient for drawing inference against assessee, it would not be logical to confine such inference only when credit item be in assessee's name - Held, yes - In account books of assessee, ITO noticed certain credit and debit entries in favour of assessee's mother and sister - Dissatisfied with explanation furnished by ladies that source of said amount was from their past savings, ITO treated all cash credits to income of assessee - Whether after explanation by mother and sister about said items being theirs were not accepted, only other inference would be that items formed part of assessee's income, for it was nobody's case that they were capital gains, nor other person's cash - Held, yes - Whether therefore, said addition was justified - Held, yes Section 154 of the Income-tax Act, 1961 [Corresponding to section 35 of Indian Income-tax Act, 1922] - Rectification of mistakes - Apparent from record - Assessment years 1945-46 to 1948-49 - In proceeding under section 34 of 1922 Act, ITO made additions on account of unexplained cash credits which was upheld by AAC - Tribunal gave part relief to assessee on footing that amounts of credit entries in several years amounted to only Rs. 22,500 whereas their total came to Rs. 46,500 - On application under section 35 of 1922 Act, Tribunal corrected its mistake - Whether Tribunal had jurisdiction to correct error - Held, yes FACTS The ITO, while scrutinizing the account books of the assessee for the assessment year 1949-50, noticed in the ledger certain credit and debit entries in favour of the assessee's mother and his sister. On being called upon to explain the…

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