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1. M. M. Mohammad Mama Labbai Rs. 25,000/-

2. A. K. Mohamed Omar Sahib Rs. 30,000/-

3. V. M. K. Dawood Labbai Rs. 30,000/-

4. N. K. A. S. Syed Mohammad Rs. 30,000/-

Though the Income-tax Officer suspected that the said amount represented the secret profits of the fir, he was not able to get any definite information to hold that the said sum also was part of the profits of the firm. Ignoring that item, he made an order of assessment dated 17-3-1941. On 31-3-1941, the said amount was spread over the accounts of the fourteen partners. The explanation of the assessee was that in October 1939, 14 persons contributed amounts totalling Rs.1,15,000/- with the view of constituting a partnership, that the said amounts were remitted to Syed Mohamed Ali of Calcutta as the money was urgently required for purchasing skins for the partnership and that the money was subsequently adjusted on 31-3-1941 by transferring the same to the capital account of the four partners and thereafter to that of the 14 parners.

These observations, therefore, support the view that the mere fact that an Income-tax Officer before the assessment could have discovered the facts which he came to know at a subsequent stage, if he acted with diligence even before the assessment, could not in law preclude him from acting under Section 34, if as a matter of fact, he received definite information subsequently.

(10) In -- 'Jitan Ram Nirmal Ram v. Commissioner of Income-tax', (F), learned Judges held that the phrase 'definite information in Section 34 cannot be construed in an universal sense and its meaning must depend and must necessarily vary with the circumstances of each case. But they made it clear that it is necessary that the information should be more than mere gossip or rumour.

(14) Applying the said principles, can it be said that in this case that the Income-tax Officer received definite information on the basis of which he came to a reasonable belief that the income of the assesse escaped assessment ? From the statement of facts, it is clear that even before the first assessment, the Income-tax Officer had not only a doubt, but even a shrewd suspicion that some fraud was committed in respect of the item of Rs. 1,15,000/-. Though he made enquiries he did not get any definite information before the closing of the assessment to induce him to come to any reasonable belief that the said item represented the profits of the firm.

It was communicated to him only subsequent to the assessment and that fact really and naterially turned the scales against the assessee. We would, therefore, hold that 'discovery' within the meaning of the section was made by the Income-tax Officer on the receipt of definite information from the Income-tax Officer. Tuticorin Circles, and therefore, the action taken by the Income-tax Officer under S. 34 the Act was right.

(15) It was then contended that the information given by the Income-tax Officer was not of a fact but only based on his surmises. The report clearly shows that he made the enquiries and the enquiries convinced him that the partners had no other source yielding the required amount for making a deposit, towards the capital of the business. We cannot, therefore, say that the communications made by the Income-tax Officer, Tuticorin was not 'definite information" within the meaning of the section.