Law:

Section:

Section 147(a) of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - Assessment year 1964-65 - Assessee-company in its original assessment disclosed that one G had advanced certain amount to assessee by way of cash credit - Later on in assessment proceedings against G, it was stated by G that he indulged in hawala business with various parties including assessee and that their firm merely lent its name to assessee and no amount was advanced - Whether assessee failed to disclose primary fact necessary for assessment purpose and, thus, initiation of reassessment proceedings under section 147(a) was justified - Held, yes Facts In the account books of the assessee-company, it was shown that one G had advanced certain amount to the assessee by way of cash credit. Later on in the assessment proceedings initiated against G, G stated that he indulged in hawala business with various parties including the assessee and that their firm merely lent its name to the assessee and no amount was advanced. The ITO initiated reassessment proceedings under section 147(a) against the assessee and added the aforesaid amount of advance as income of the assessee from undisclosed sources. On second appeal, the Tribunal upheld initiation of proceedings under section 147(a) and the addition made in the income of the assessee. On reference: Held Following the decision in the case of Hazi Amir Mohd. Mir Ahmed v. CIT [1977] 110 ITR 630 ( Punj. & Har.), in the instant case the Tribunal was justified in holding that the action of the ITO under section 147(a ) was right. Case referred to Hazi Amir Mohd. Mir Ahmed v. CIT [1977] 110 ITR 630 (Punj. & Har.). B.R. Mahajan for the Applicant. L.K. Sood for the Respondent. JUDGMENT Mital, J.-The Tribunal Amritsar Bench has referred the following question of law for opinion of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that action under section 147(a) of the Income-tax Act, 1961 was rightly taken by the Income-tax Officer against the assessee?" 2. In order to answer the question some of the facts found by the Tribunal have to be kept in view. In the account…

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