Law: Income Tax Act, 1961

Section: 147,256

Law: Income Tax Act, 1922

Section: 34,66

Section 147, read with section 256, of the Income-tax Act, 1961 (Corresponding to section 34, read with section 66, of the Indian Income-tax Act, 1922) - Income escaping assessment - General - Assessment year 1945-46 - At time of assessment for relevant assessment year, assessee-HUF submitted separate sets accounts of its three businesses and also produced books of account which were examined by examiner of accounts - After completion of assessment, ITO came to know that assessee bank purchased a draft from bank and realised this amount at another branch of said - Assessee's explanation for not being able to produce either his account books or pass books of said bank, was disbelieved - He, therefore, initiated proceedings against assessee under section 34(1)(a) of 1922 Act and made additions - Tribunal held that there was no omission or failure on part of assessee to disclose fully and truly all material facts necessary for assessment and thus deleted addition made by ITO - Whether findings of Tribunal were findings of facts and, therefore, no referable question of law arose from its order - Held, yes FACTS The assessee-HUF was carrying on cloth business at Ahmedabad. In accounting period relevant to the assessment year 1943-44, the assessee opened a branch at Karachi. For the assessment years 1944-45 and 1945-46 the assessee maintained joint accounts for the whole period of two years. In the assessment year 1945-46, he opened a branch office at Bombay. The original assessment for the aforesaid two years was completed under the provisions of section 23(3) of the 1922 Act. In the assessment for the year 1945-46, the assessee's income was derived from his cloth business carried on at Ahmedabad, Karachi and Bombay and certain other properties. Separate sets of accounts were maintained for the head office as well as for the two branches. The books of account were produced and were examined by the examiner of accounts who submitted a report to the ITO concerned. After completion of the assessment, the ITO received information that the assessee had purchased a draft for Rs. 1,10,000 from the Bank at Bombay and the draft was deposited in 17-7-1944, in a branch of the…

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