TMI Blog1954 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the Department that certain income belonging to the assessee had escaped assessment and the Income-tax Officer had received definite information leading to that result. The case for the Department was that the assessee had two houses-one in Sarup Nagar and the other in Prem Nagar at Kanpur-which stood in the name of his wife Anchi Bai but which really belonged to the assessee and his wife was only a benamidar for him. The Income-tax Officer included the income of both these house in the assessable income of the assessee but, on appeal, the Income-tax Appellate Tribunal had excluded the house in Prem Nagar on the ground that it was the property of Anchi Bai bought by her out of her own money. As regards the house in Sarup Nagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavits of the husband and the wife but the Tribunal has said that the evidence was not satisfactory. In the appellate order, the Tribunal said: The entire consideration of ₹ 25,000 could not come out of the gift from the father-in-law, the quantum of which was limited to ₹ 15,000. The receipt of gifts on other occasions has not at all been proved. It is difficult to accept the mere words of mouth of the lady about such receipts or savings. No attempt was made on behalf of the Department to lead evidence to show that the husband had any funds outside the account books from which he could have contributed the sum of ₹ 12,500. No circumstances, leading to that conclusion, were mentioned in the judgment of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities to show that she was not the real owner. In K.B. Sheikh Mohammad Naqi v. Commissioner of Income-tax, Punjab [1944] 12 I.T.R. 110, the Lahore High Court held that the onus of proving that the ostensible owner was not the real owner was on the Department. Learned counsel for the Department has relied on a decision of their Lordships of the Judicial Committee in Sura Lakshmiah Chetty and Others v. Kothandarama Pillai [1925] A.I.R. 1925 P.C. 181. That case is entirely distinguishable. There it was admitted that the property had been purchased by the husband with his own funds in the name of his wife. The wife's claim was that she was the beneficial owner of the property as there was an ante-nuptial agreement by which the husband had u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Excess Profits Tax, U.P., C.P. and Berar [1950] 18 I.T.R. 988, a case under Section 10-A of the Excess Profits Tax Act, where the question arose whether the assessee had done something with the main purpose of evading payment of excess profits tax, we pointed out that the mere fact that the Excess Profits Tax Officer had not accepted the explanation given by the assessee would not entitle him necessarily to come to the conclusion that the main purpose was to evade payment of excess profits tax and that even if direct evidence was not possible, such circumstances and facts should be made available on which a reasonable inference can be drawn that the main purpose was to evade payment of excess profits tax. Similar observations w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntributed by the assessee for the purchase of the house at Sarup Nagar. The next question is very simple and need not detain us long. It is as follows:- Whether, in the circumstances of the case, the 25 per cent. of the net profits payable as commission to Madanlal, an employee, should for purposes of a deduction under Section 10(2)(x) or 10(2)(xv) of the Income- tax Act, have been based on the total profits as determined by the Income-tax Officer notwithstanding the fact that the actual amount paid to him was on the basis of the net profits as shown by the books? Madan Lal was an employee. He was being paid as his salary a fixed amount and 25 per cent. of the net profits. The Income-tax Officer found that the net profits shown ..... X X X X Extracts X X X X X X X X Extracts X X X X
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