Commissioner Of Income-Tax, ... vs Vishwa Nath Arora And Co.
1983 Latest Caselaw 319 Del

JUDGMENT

Chadha, J.

1. This reference under s. 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), at the instance of the Department raises the following question.

"Whether, on the facts and circumstances of the case, the Tribunal was legally right in holding that the assessed discharged the onus that lay upon it to prove satisfactorily the source for the sum of Rs. 30,000 and in deleting the addition ?"

2. It is not necessary to refer to the facts contained in the statement of this case. The Tribunal followed the decision of this court in the case of Rattan Lal v. ITO [1975] 98 ITR 681 and held that the assessed discharged the onus that lay upon it, to prove the existence of creditors, their creditworthiness and the fact that they gave the money, and the Department was, by virtue of the provisions of the Finance (No. 2) Act of 1965, under which the voluntary disclosures were made, precluded from adding those very amounts as unexplained income of the assessed. The decision of Rattan Lal [1975] 98 (Delhi) was overruled by the Supreme Court in Jamna prasad Kanhaiyalal v. CIT [1981] 130 ITR 244. The Supreme Court came to the conclusion that the deeming fiction created by sub-s. (3) of s. 24 of the Act by virtue of which the amount declared by the declarant was to be charged to income-tax, "as if such amount were the total income of the declaring" was limited in its scope and it cannot be invoked in assessment proceedings relating to any person other than the person making the declaration under the Act so as to rule out the applicability of s. 68 of the Act. There was no warrant for the submission that s. 24 had an overriding effect over s. 68 of the Act, in so far as the persons other than the declarants were concerned.

3. We answer the question accordingly and in favor of the Department and against the assessed. As the assessed has not put in appearance, there will be no order as to costs.