The court emphasized the importance of establishing the source of the credited amount to the assessee in determining undisclosed income.

Headnote:
undisclosed income - Income Tax - The court upheld the assessment of Rs.75,000 as the undisclosed income of the assessee, rejecting the claim that the amount was received from the brother-in-law and had already been brought to tax in the brother-in-law's hands.
Fact of the Case:

The assessing officer found credits in the names of various persons in the books of accounts of the assessee, and added a total sum of Rs.1,53,000 as income from other sources. The Commissioner (Appeals) confirmed the addition, including Rs.75,000 appearing as credit in the name of Rajani Bhooshan. The assessee claimed it as genuine credit received from his brother-in-law.
Finding of the Court:

The court found no question of law to be considered in the case, as it was not established that the amount was advanced to the assessee by Rajani Bhooshan. Therefore, the court dismissed the Incometax Reference.
Issues: The main issue was whether the Tribunal was justified in upholding the assessment of Rs.75,000 as the undisclosed income of the assessee.
Ratio Decidendi: The court emphasized that unless it is established that the amount was advanced to the assessee, the fact that the amount was brought to tax as income of Rajani Bhooshan would not advance the case of the assessee.
Final Decision: The Incometax Reference was dismissed by the court.

Judgment :-

Radhakrishnan, J.

The following question of law has been referred under Section 256(1) of the Income-tax Act for our consideration.

“Whether on the facts and in the circumstances of the case, the Tribunal was justified in upholding the assessment of Rs.75,000/- as the undisclosed income of the assessee?”

Assessee is an individual deriving income from business as a dealer in textiles at Perumbavoor. In the books of accounts of the assessee, assessing officer found credits in the names of various persons. In the assessment a total sum of Rs.1,53,000/- was added on account of credit as income from other source. The Commissioner (Appeals) confirmed the addition which included Rs.75,000/- appearing as credit in the name of Rajani Bhooshan. Assessee claimed it as genuine credit as the assessee had received the amount from his brother-in-law under Section 143(3) read with Section 147(a) a sum of Rs.75,000/- was brought to tax as his income other source. It was stated that in view of the fact that the Department had initiated proceedings under Section 148 of the Income-tax Act on Rajani Bhooshan for the reason that there was escaped income in his hands the same amount could not have been treated as the undisclosed income of the assessee. On that basis Tribunal has referred the question to this court under Section 256(1) of the Act.

2. We find no question of law to be considered by this court in this case. As rightly pointed out by the assessing authority as well as by the appellate authority, unless and until it is established that Rajani Bhooshan had advanced the amount to the assessee mere fact that an amount of Rs.75,000/- was also brought to tax as income of Rajani Bhooshan would not advance the case of the assessee. No question of law arises for consideration in this case, we therefore find no reason to answer the reference Incometax Reference would stand dismissed.

Communicate a copy of this judgment to the Incometax Appellate Tribunal, Cochin Bench.

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