1958 (11) TMI 3 - SUPREME COURT

Whether the Income-tax Appellate Tribunal was bound by the findings of fact of the Income-tax Officer relating to the nature and division of the assets of the joint family in question which he arrived at in his enquiry under section 25A(1) of the Indian Income-tax Act ?

Whether there was any material or evidence upon which the taxing authorities could legally hold that the amount of ₹ 2,30,346 (Rupees two lakhs thirty thousand three hundred and forty-six) represented undisclosed profits of the accounting year in question ?

Held that:- What that tax is would depend on the assessment of income in proceedings taken under section 23, and an order under section 25A would have no effect on that assessment. It is in this context that we must read the observations in the order under section 25A relied on for the appellant. In fact, that order does not expressly decide that the family had the jewels mentioned in exhibit A, and that they were converted into cash as claimed by the appellant. Nor could such a finding be implied therein, when regard is had to the scope of the proceedings under section 25A and to the fact that the order under section 23(3) holding that the sum of ₹ 2,30,346 did not represent the value of the family jewels sold was passed on the same date as the order under section 25A and by the very same officer.

There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. That is precisely what the Income-tax authorities have done in the present case, and we do not find any grounds for holding that their finding is open to attack as erroneous in law. Appeal dismissed.