137 and 138 of 1977 reported in 1980 Tax LR 726 whereby the following question has been answered by the High Court in favour of the assessee and against the Revenue Whether on the facts and in the circumstances of the case and on a true interpretation of Section 69 of the Income tax Act, 1961, the Income tax Appellate Tribunal is right in law in holding that Section 69 of the Act cannot be invoked in respect of the investments of the assessee and that therefore the addition made for the assessment year 1968 69 or as the case may be 1969 70 should be deleted ?
The assessee is a muslim lady who was aged about 20 years during the previous year relevant for the assessment year 1968 69.
Section 69 of the Act companyferred only a discretion on the Income tax Officer to deal with the investment as income of the assessee and that it did number make it mandatory on his part to deal with the income as income of the assessee as soon as the latters explanation happened to be rejected.
The appeals relate to the assessment years 1968 69 and 1969 70.
32,628/ as income from other sources in the assessment year 1968 69 and an addition of Rs.
The Income tax Appellate Tribunal hereinafter referred to as the Tribunal , however, held that even though the explanation about the nature and sources of the purchase money was number satisfactory but in the facts and circumstances of the case it was number possible for the assessee to earn the amount invested in the properties and that by the stretch, of imagination companyld the assessee be credited with having earned this income in the companyrse of the assessment year or was even in a position to earn it for a decade or more.
On November 15, 1967 she had purchased 16 cents of land in Ernakulam and the amount spent by.
These appeals have been filed against She judgment of the Kerala High Court dated November 21, 1979 in ITR Nos.
On November 27,1968, she purchased another 12 cents of land at Ernakulam and the total investment for this purchase was Rs.
On that view the Tribunal allowed the appeals of the assessee and cancelled the assessment made by the Income tax Officer.
25,902/ in the assessment year 1969 70.
The said orders were affirmed in appeal by the Appellate Assistant Commissioner.
her, inclusive of stamp and registration charges, for this purchase was Rs.
2,000/ by the Income tax Officer who made an addition of Rs.
25,902/ the explanation of the assessee regarding the source of the purchase money for these investments was that the same were financed from out of the savings from the income of the properties which were left by her mothers first husband.
The Tribunal took the view that although the explanation of the assessee was liable to be rejected.
Thereafter the Tribunal at the instance of the Revenue referred the question abovementioned to the High Court for its opinion.
The said explanation offered by the assessee was rejected except to the extent of Rs.
34,628/ .
