- (1.) The assessee, a banking company, had the assessment for the year ending on 31.12.1968, completed on 4.10.1969. Subsequently, however, the assessment was reopened u/s. 147(a) of the Income-tax Act, 1961 (the Act), to bring to tax a sum of Rs. 54,485.00 in respect of interest suspense account. It is, however, according to the assessee, the sum representing interest on loans, recovery of which was considered doubtful.
(2.) Incidentally be it noted that the assessee had disclosed this sum of Rs. 54,485.00 in the balance sheet as unrealised amount of interest along with the return filed by it and the ITO had accepted the return and as a matter of fact had excluded that amount in the assessment order completed on 4.10.1969.
(3.) The factual score depicts that in terms of a notice u/s. 147(a) the assessment was reopened and a sum of Rs. 54,485.00 was subjected to tax on the ground that the interest accrued and due on the loans advanced by the bank was the income of the bank for the relevant assessment year and the assessee has failed to disclose this income in the return filed earlier.;