- (1.) This reference under Section 66(2) of the Indian I.T. Act, 1922, at the instance of M/s. Northern Bengal Jute Trading Co. Ltd., Calcutta, the assesses. relates to the assessment year 1947-48, for which the relevant previous year ended on the 30th June, 1946. The facts found by and/or admitted before the Tribunal are shortly as follows :
(2.) The assessee carried on business as a dealer in jute. In the course of the assessment of the assessee for the assessment year 1948-49, the ITO, on scrutiny of the accounts of the subsequent year, found diverse cash credit entries on diverse dates aggregating to Rs. 1,40,000 in the names of several persons who were petty employees of the assessee and treated the same as the income of the assessee from undisclosed sources. There were appeals by the assessee and ultimately the Tribunal directed the ITO to exclude the said amounts from assessment for the said assessment year and to assess the same, according to law, in the earlier assessment year 1947-48. Accordingly, the assessment for the assessment year 1947-48 was reopened under Section 34 of the Indian I.T. Act, 1922. The assessee's explanation was that the said amounts were in fact advanced by M/s. Surajmal Nagarmal, although the same were entered in its books in the names of the said employees and in support thereof the assessee relied on a confirmation furnished by M/s. Surajmal Nagarmal to the effect that out of a fund of about Rs. 16,000 lying idle with them in cash as admitted before the Income-tax Investigation Commission, the said sum of Rs. 1,40,000 had been advanced to the assessee. The ITO did not accept the said explanation of the assessee and added back the same to the income of the assessee as income from undisclosed sources. Such addition was confirmed both by the AAC and the Tribunal on successive appeals by the assessee.
(3.) The ITO being of the opinion that the assessee had concealed the particulars of its income or had deliberately furnished inaccurate particulars thereof, initiated proceedings against the assessee under Section 28(l)(c) of the Indian I.T. Act, 1922, and issued notice to the assessee under Section 28(3) of the Act.;