On scrutiny it was found on the basis of peak cash credits in each assessment year that the amounts companyered by hundies were as under Assessment years Peak cash credits 1959 60 RS.
The Wealth tax officer thereafter reopened the assessments or the assessee to wealth tax for assessment years 1957 58 to 1964 65 on the ground that he had reason to believe that certain wealth of the assessee had escaped assessment during the said years and that his belief was founded on the disclosure made by the assessee under section 68 of the Finance Act.
6,38,325/ 1962 63 RS.
He however included the sums mentioned in the above statement in the net wealth of the respective assessment years and determined the wealth tax payable by the assessee.
The appeals filed by the assessee against the orders of the Wealth tax officer before the Appellate Assistant Commissioner were dismissed.
6,82,974/ 1963 64 RS.
Appeals by certificate from the Judgment and order dated 21.12 1972 of the Gujarat High Court in Wealth Tax Reference No.
7,01,578/ As can be seen from the above statement the assessee had substantial sums with him in the years in question which had number been disclosed earlier.
4,57,465/ 1960 61 RS.
The Wealth tax officer however held that since in his balance selects the assessee had number shown the liability to pay income tax the deduction of the amounts claimed companyld number be allowed in any of the assessment years and accordingly the orders of reassessment were passed by him after disallowing the claim made by the assessee.
5,59,8231 1961 62 RS.
Since these amounts companystituted the wealth which was liable to tax on the respective valuation dates the assessee filed returns of wealth for the above mentioned years in companypliance with the numberices issued to him and in the companyrse of the assessment proceedings he claimed the deduction for income tax payable by him in respect of the sums which had been progressively earned by him from year to year and which were liable to income tax under the relevant income tax law in force during the years relying upon the decision of this Court in Kesoram Industries and Cotton Mills Ltd v. Commissioner of Wealth tax Central , Calcutta.
After hearing the parties the High Court answered both the questions in the negative and in favour of the Revenue by its judgment dated December 21 1972.
Thereafter at the instance of the Commissioner of Wealth tax the Tribunal referred under section 27 of the Act the two questions mentioned above to the High Court.
Accordingly the Tribunal allowed the appeals of the assessee.
On a certificate granted by the High Court under section 29 1 of the Act the assessee has companye up in appeal to this Court.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
S. Desai, Shardul S. Shroff and H. S. Parihar for the Appellant.
Having regard to the assessment years in question the second question should be read as including within its scope also the question whether the Tribunal was right in holding that the liability to pay tax on the amount disclosed under section 68 of the Finance Act, 1965 arose number under that Finance Act but under section 4 of the Income tax Act 1961.
T. Desai, P. A. Francis and Miss A. Subhashini for the Respondent.
1217 1222 of 1973.
The assessee who is the appellant in these appeals had been assessed on the basis of his returns of net wealth and the statements filed therewith in the status of an individual to wealth tax under section 16 3 of the Act during the assessment years 1957 58 t 1964 65 on various dates between January 15 1960 and July 14 1964.
Alongwith the declaration the assessee filed a statement that this companycealed income had been earned by him during the assessment years 1957 58 to 1964 65.
2 of 1969.
The Judgment of the Court was delivered by VENKATARAMIAH, J. On the basis of a certificate granted under section 29 1 of the Wealth tax Act 1957 hereinafter referred to as the Act the appellant has filed these appeals against the judgment and order dated December 21 1972 of the High Court of Gujarat in Wealth tax Reference No 2 of 1969.
The amount of income tax was companyputed at 60 of the total companycealed income and it was paid as companytemplated under section 68 of the Finance Act.
Whether the Tribunal was right in holding that the liability to pay tax on the amount disclosed under section 68 of the Finance Act 1965 arose number under that Finance Act but under section 3 of the Indian Income tax Act 1922.
Subsequently the assessee made a disclosure under section 68 of the Finance Act 1965 hereinafter referred to as the Finance Act of Rs.7,00,000 which had been shown as having been companyered by some hundi transactions with a companycern known as M s Abdul Razack Co. in his books of account at the Bombay branch of his business.
He however did number allocate the total sum disclosed amongst different assessment years but showed it in a lump sum.
7,01,578/ 1964 65 RS.
The questions referred to the High Court under section 27 of the Act by the In companye tax Appellate Tribunal Ahmedabad Bench read thus Whether on the facts and in the circumstances of the case the liability in respect of income tax payable on the companycealed income disclosed by the assessee pursuant to section 68 of the Finance Act 1965 is deductible under section 2 m of the Wealth tax Act 1957 in companyputing the net wealth of the assessee for the assessment years 1959 60 1960 61 1961 62 1962 63 A 1963 64 and 1964 65.
