COMMISSIONER OF INCOME TAX Vs. ASHOK ARORA
LAWS(P&H)-2009-3-186
HIGH COURT OF PUNJAB AND HARYANA
Decided on March 09,2009

COMMISSIONER OF INCOME TAX Appellant
VERSUS
ASHOK ARORA Respondents

JUDGEMENT

J.S.KHEHAR, J. - (1.)THE assumption that the respondent -assessee had evaded his tax liability was made by the AO (in the assessment order the Bank of Maharashtra and the Punjab National Bank. The explanation tendered by the respondent -assessee was that the aforesaid deposits were made out of money received from the sale of lottery tickets. Insofar as the assessment under reference is concerned, i.e., for the asst. yr. 1997 -98, the respondent -assessee had not filed any return of income. The AO was of the view that income from the sale of lottery tickets invested as fixed deposits in different banks, as well as interest derived by the respondent -assessee on the aforesaid fixed deposits had escaped assessment.
(2.)THE aforesaid notice, the respondent -assessee filed a return (for the asst. yr. 1997 -98) declaring his income at Rs. 1,64,614.
(3.)STATUTORY notices under ss. 142 and 143 of the IT Act, 1961, were issued to the respondent -assessee. His response was sought through a detailed questionnaire furnished to him. Summons were also issued to the bankers with whom the respondent -assessee had maintained his fixed deposits. Summons were also issued to the Rajasthan State Lotteries, Jaipur, for gathering further information on the issue. In response to the questionnaire furnished to the respondent - assessee, he submitted his reply. He also produced his books of account. On the basis of the aforesaid exercise carried out by the AO, the AO arrived at the conclusion that the respondent -assessee had deposited Rs. 63,23,642 by way of fixed deposits with different banks, without satisfactorily explaining the source of the aforesaid investment. Since the AO was not satisfied with the explanation tendered by the respondent -assessee, the same was treated as unexplained investment under s. 69 of the IT Act, 1961. As such, an addition of Rs. 1,25,76,000 was made by the AO to the income of the respondent -assessee.
Besides the aforesaid addition, penalty proceedings were initiated against the respondent -assessee under s. 271(1)(c) of the IT Act, 1961, on the ground that the respondent -assessee had failed to file his return of income within the postulated time. Additionally, penalty proceedings were also initiated against the respondent -assessee under s. 271B of the IT Act, 1961, as he had failed to get his accounts audited.



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