SHAGOON EMPORIUM Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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O.P. Garg, Judicial Member -
(1.) THIS appeal has been preferred by the assessee against the order dated 19-1-1979 of the Commissioner (Appeals).
(2.) 1974-75 is the assessment year concerned. Financial year is the previous year. The assessee is a HUF. Assessment was completed by the ITO as per order dated 12-9-1977 determining total income at Rs. 2,54,531. The said assessment was still pending when Section 144B of the Income-tax Act, 1961 ('the Act'), came to be newly inserted effective from 1-1-1976. Returned income was Rs. 24,250. As the ITO proposed to assess total income at a figure of Rs. 1,31,081, namely, with a difference of more than Rs. 1 lakh, he, on 18-3-1977, sent the draft order to the assessee as contemplated under Section 144B(1). The assessee's objections to the said draft order were received by the ITO on 13-4-1977 and the same were forwarded by him to the IAC, who in turn, sent requisite directions on 5-9-1977.
It transpires that some months after the receipt of objections under Section 144B through the ITO, the IAC on 10-8-1977 sent a notice to the assessee in purported exercise of powers under Section 144A and after hearing the assessee in that regard, sent separate directions to the ITO under Section 144A(1) as well. These directions also bore the same date as the directions under Section 144B, namely, 5-9-1977.
(3.) PURSUANT to the IAC's directions under Section 144A(1), the ITO sent to the assessee, a notice calling upon it to explain the discrepancy of Rs. 1,10,021 as pointed out by the IAC between the balance sheet entry of Rs. 1,51,935 regarding the sundry creditors and the figure in separate accounts of such creditors, namely, Rs. 2,61,955. According to the ITO, the assessee offered no explanation as to the nature and/or source of the differential sum. Consequently, the ITO added Rs. 1,10,021 as the assessee's deemed income from undisclosed sources. Similarly, additions of Rs. 31,515 (figure of Rs. 31,550 mentioned in para 3 of the AAC's order is erroneous) and Rs. 47,998 also came to be ultimately added by the ITO, pursuant to the IAC's direction under Section 144A(1) as aforesaid.;
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