| Case ID |
2679dfbd-2585-4896-96f8-47b8b7ecae72 |
| Body |
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| Case Number |
IT REFERENCE NO. 229 OF 1975 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal's decision to delete the additions made to the assessee's income was not justified. The Supreme Court ruled that the provisions of the Finance (No. 2) Act, 1965, could not be invoked in assessment proceedings for anyone other than the person making the declaration. Thus, the earlier decision in Rattan Lal v. ITO was overruled, affirming that the assessee did not satisfactorily prove the source of the cash credits as required under section 68. |
| Summary |
This case concerns the interpretation of section 68 of the Income-tax Act, 1961, relating to cash credits and the implications of the Finance (No. 2) Act, 1965. The Tribunal had relied on a previous Delhi High Court decision to delete additions to the income of Vishwa Nath Arora & Co. However, the Supreme Court overruled this decision, clarifying that the provisions of the Finance Act were limited in scope and did not apply to third parties. This ruling emphasizes the necessity for assessee's to prove the source of their cash credits to avoid tax implications. The case highlights the importance of legal precedents in tax law and the need for proper documentation and proof of creditworthiness. It serves as a crucial reference for similar cases in the future, affecting how cash credits are treated under tax law. This ruling is relevant for tax professionals, accountants, and legal practitioners dealing with income tax assessments, ensuring compliance with the Income-tax Act and related laws. |
| Court |
Delhi High Court
|
| Entities Involved |
Not available
|
| Judges |
S.S. Chadha,
H.C. Goel
|
| Lawyers |
K.K. Wadhera,
P.N. Mishra
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Vishwa Nath Arora & Co.
|
| Citations |
1985 SLD 926,
(1985) 151 ITR 751
|
| Other Citations |
Rattan Lal v. ITO [1975] 98 ITR 681 (Delhi),
Jamnaprasad Kanhaiyalal v. CIT [1981] 130 ITR 244 (SC)
|
| Laws Involved |
Income-tax Act, 1961,
Finance (No. 2) Act, 1965
|
| Sections |
68
|