GANAPATI ISHWARAPPA BAGEWADI Vs. COMMISSIONER OF INCOME TAX MYSORE

JUDGEMENT

(1.) This case has come to us by means of a reference under section 66(2) of the Indian Income-tax Act, 1922 (to be referred to hereinafter as the "Act"). The question referred for our opinion i : "Whether the finding of the Appellate Tribunal is vitiated as being based on suspicion and partly on irrelevant materials which were not relied on by the department before the said Appellate Tribunal and without drawing the attention of the petitioners thereto."

(2.) The order of the Tribunal whose correctness is assailed before us is found in I.T.A. No. 4017 of 1954-55 on the file of the Income-tax Appellate Tribunal, Bombay Bench "A". It is a common order in respect of the assessment for the years 1947-48, 1948-49, 1949-50, 1950-51 and 1951-52. The order assessing the assessee to income-tax for the assessment year 1947-48 was made on March 29, 1952. The orders relating to the income-tax for the other assessment year were made on March 25, 1953.

(3.) The returns made by the assessee for the relevant years were rejected by the Income-tax Officer. The Income-tax Officer did not believe the accounts produced by the assessee. He was of the opinion that the income credited to the accounts of Messrs. A.M. Khot, S.B. Wadikar, B. B. Kolhapure, R.V. Shinde, D.S. Patil, M.B. Murdande and S.P. Patil were really the income earned by the assessee. He added those profits to the profits earned by the assessee and assessed the assessee accordingly. The reasons for so including are found in the assessment order made for the assessment year 1947-48. More or less identical reasons are given in his other orders. These are reasons mentioned by hi : "For in the previous year these sales (assessed on) were about Rs. 227 thousands and odd, as against sales of Rs. 145 thousands and odd this year. There are some suspicious accounts wherein both purchases and sales are effected, which deserve special mention, viz : Name Sales Profit Rs. Rs. Sri. A.M. Khot 59,896 10,336 " S.B. Wadikar 66,471 17,197 " B.B. Kolhapure 91,394 15,584 " R.V. Shinde 47,342 3,991 " D.S. Patil 21,304 10,550 " M.B. Murdande 111,679 18,556 " S.P. Patil 78,917 13,882 *