By K. B. Bhujle, Advocate
New Page 1
6 Income : S.
2(24) of Income-tax Act, 1961 :
A.Ys. 1987-88 and
1988-89 : Refund collected by producing bogus TDS certificates is income
taxable under residuary head.
[CIT v. K. Thangamani, 309 ITR 15 (Mad.)]
The assessee was engaged in tax consultancy and
audit work. For the A.Ys. 1987-88 and 1988-89 the Assessing Officer assessed
the refunds received by the assessee on the basis of bogus TDS certificates as
income from other sources. The Tribunal deleted the addition holding that the
amount of refunds received by the assessee by fraudulent means could not be
assessed as income of the assessee.
On appeal by the Revenue the Madras High Court
reversed the decision of the Tribunal and held as under :
“(i) The expression ‘income’ in S. 2(24) of the
Income-tax Act, 1961 is wide and the object of the Act being to tax income it
has to be given an extended meaning. Any kind of income earned by the assessee
attracts income-tax at the point of earning and tax law is not concerned with
the ultimate event how the income is expended. The Act makes an obligation to
pay tax on all income received. The Act considers income earned legally as
well as tainted income alike.
(ii) When the Tribunal found that the assessee
had indulged in fabricating TDS certificates and got refunds from the
Department, it should not have come to the conclusion that such income was not
taxable. There is a clear factual finding recorded by the Assessing Officer as
well as the Commissioner (Appeals) to the effect that the assessee had
indulged in filing bogus TDS certificates and got refund of the amount from
the Department. It was also the admitted case of the assessee before the
Department as well as the Central Bureau of Investigation during the course of
investigation into the offence that he had indulged in the act of fabricating
TDS certificates and collecting refunds from the Department.”
