GUNDATHUR THIMMAPPA AND SONS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a Hindu undivided family trading in cotton and other goods. THEir accounting year is Deepavali to Deepavali. THEir income for the accounting year May 20, 1946, to November 12, 1947, was assessed to tax under the Income-tax Act for the assessment year 1948-49. During the scrutiny of accounts, the officer discovered the following entries purporting to be loans received from one Raja Sathyamma : <FRM>JUDGEMENT_70_ITR70_1968Html1.htm</FRM>

(2.) THE officer refused to believes these entries as representing genuine loans. THE explanations offered by the assessee were found by him to be unsatisfactory, with the result, he added the said sum to the income returned by the assessee.

(3.) THE Tribunal having refused to state a case on assessee's application under sub-section (1) of section 66 of the Income-tax Act, he petitioned to this court under sub-section (2) thereof in Civil Petition No. 215 of 1950. By an order made therein on April 11, 1962, this court called upon the Tribunal to refer the following questions :