COMMNR. OF INCOME TAX, SALEM vs. K. CHINNATHAMBAN

C.A. No.-003230-003230 - 2007Supreme Court24 July 20073 pages
For Petitioner: B. V. BALARAM DAS
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court held that the Tribunal erred in directing the linking of unexplained deposits with the accounts of the alleged firm, M/s V.V. Enterprises, which was found to be fictitious. The onus was on the individuals in whose names the deposits appeared to explain their source.

What were the facts?

A search revealed unexplained investments of approximately Rs. 1.18 crores. The Assessing Officer treated these as undisclosed income of individuals, including K. Chinnathamban. The Tribunal, however, directed that these amounts should be linked to the books of a firm, M/s V.V. Enterprises.

What were the issues?

Whether unexplained investments should be treated as income in the hands of individuals or linked to a fictitious firm. The burden of proof for explaining the source of deposits.

Which sections of the Income-tax Act were involved?

Section 69,Section 69A,Section 133A,Section 132

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Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3 CASE NO.: Appeal (civil) 3230 of 2007 PETITIONER: Commissioner of Income Tax, Salem RESPONDENT: K. Chinnathamban DATE OF JUDGMENT: 24/07/2007 BENCH: S. H. Kapadia & B. Sudershan Reddy

JUDGMENT: J U D G M E N T CIVIL APPEAL No. 3230 OF 2007 (arising out of S.L.P. (C) No. 11596/2006) with Civil Appeal No. 3231 of 2007 @ SLP(C) No. 14262/06 Civil Appeal No. 3232 of 2007 @ SLP(C) No. 14263/06 Civil Appeal No. 3233 of 2007 @ SLP(C) No. 15538/06 Civil Appeal No. 3234 of 2007 @ SLP(C) No. 17035/06 Civil Appeal No. 3235 of 2007 @ SLP(C) No. 18654/06 KAPADIA, J. Leave granted.

2.

The short question which arises for determination in this group of civil appeals is: Whether in the facts and circumstances of the case the Tribunal was right in holding that income on the unexplained investments should be considered in the hands of the firm, M/s V.V. Enterprises.

3.

For the sake of convenience, we mention hereinbelow the facts of the civil appeal arising out of Special Leave Petition (C) No. 11596/2006. 4. K. Chinnathamban, the respondent-assessee, was connec

The order continues below.

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