Law: Income Tax Act, 1961

Section: 256(2),132(5),143(3)

Section 69A of the Income-tax Act, 1961 - Unexplained money, etc. - Assessment year 1968-69 - On search conducted by revenue in September 1967 in assessee's business premises and house, etc., revenue found assets of Rs. 1,82,530 with assessee, which were in form of cash, foreign currency, gold sovereigns and investment in residence - Assessee's explanation for source of said assets was (i) that his wife had received gifts of Rs. 40,000 and Rs. 1,50,000, from her mother-in-law and father-in-law, respectively, and out of these gifts aforesaid assets were acquired in 1966, (ii) that thereafter said gifts were lying in cash with assessee's wife and he had shown same in his wealth-tax returns right from assessment year 1963-64, which had been filed long before date of search - Both alleged donors had died in 1951 and 1954, respectively - Record showed that alleged returns merely bore a stamp mark but did not bear any inward number or initials of receiving clerk or ITO and that in Part IV of returns assessee had shown that amount of Rs. 1,90,000 did not belong to him but to his wife - Whether alleged wealth-tax returns could be taken to have been filed by assessee on various dates as shown in respective returns -Held, no - Whether same were filed later on upon discovery in search - Held, yes - Whether assets of Rs. 1,82,530 discovered in course of search represented undisclosed income of assessee - Held, yes FACTS The Income-tax Department conducted a raid at the assessee's house, his locker and his business premises sometime in September 1967 and found assets of Rs. 1,82,531, which were in the form of cash, foreign currency, gold sovereigns and investment in residence. The assessee by way of explanation for the source of the assets submitted (i) that his wife had received gifts of Rs. 40,000 and Rs. 1,50,000 from her mother-in-law and father-in-law, respectively, and out of these gifts the aforesaid assets were acquired, and (ii) that the said gifts were lying in cash with the assessee's wife and that he had shown the same in his wealth-tax returns right from the assessment year 1963-64, which had been filed long before the date of search. The ITO as well as the…

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