TMI Blog1992 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1971-72 with a declaration disclosing the source of the sum of Rs. 3,30,000 is not in dispute, it was open to the Tribunal to hold that the return of the assessee showing the sum of Rs. 3,30,000 as exempted in the exemption column of the return for the assessment year 1971-72, was in fact yet to be established ? 5. Whether, in view of the fact that disciplinary proceedings and criminal cases are still continuing and are pending against the assessee and in view of the further fact that the assessee at the material time was just a low paid clerk in the Government of West Bengal at a total yearly salary of Rs. 850 on a charge of defalcation the Tribunal was justified in law in treating the sum of Rs. 3,30,000 as income of the assessee from undisclosed sources ?" The facts leading to this reference are stated hereafter: The Income-tax Officer, for the assessment year 1972-73, completed the assessment of the assessee under section 143(3) read with section 144B. He noted in the assessment order that the assessee filed a duplicate return of income on January 14, 1972, showing an income of Rs. 850 under the head "Salaries". It was stated before the Income-tax Officer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, offered the assessee further opportunity to state his explanation in writing regarding the addition of fixed deposits of Rs. 3 lakhs and also in respect of other investments in the form of motor car and truck. The Income-tax Officer considered other investments in the form of motor car and truck and also in respect of another sum of Rs. 1,10,000 seized from the house of the assessee's mother-in-law. But, for the present reference application, we are concerned only with the first amount of Rs. 3 lakhs. The Income-tax Officer noted that, at a later stage, the assessee took for the first time the plea that Rs. 3 lakhs represented money received from East Pakistan before March 31, 1971, but nothing was noted about the source of the money, except that it was a capital receipt. It was also mentioned that the assessee, however, admitted that Us. 3 lakhs belonged to him and that he was the legal owner of the same. He pointed out that no evidence was shown that the money was received before March 31, 1971. Another plea was taken for the first time before the Income-tax Officer, vide the assessee's letter dated March 20, 1978, to the effect that the assessee submitted a return for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim that the receipt was of capital nature. He found that no receipt was furnished by the assessee in respect of the amount, nor was there any security in this respect. He, therefore, concluded that the assessee was not able to place anything on record to show that the money was received prior to April 1, 1971. According to the Income-tax Officer, the filing of the return for the assessment year 1971-72 along with the declaration which was claimed to have been made on October 12, 1971, would not improve the case of the assessee. Accordingly, he added the amount as income of the assessee from undisclosed sources under section 69. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), before whom it was contended that the assessee had declared Rs. 3.30 lakhs in the return for the assessment year 1971-72 filed earlier, on which no decision was taken in so far as the said money declared in the return for the assessment year 1971-72 was concerned. It was, therefore, concluded that the same cannot be included in the assessment for the year under consideration. It was claimed that the Income-tax Officer has not brought any material to show that the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Disclosure Scheme would not have the effect of converting the money into the income of the declarant, if it did not belong to the declarant. Reference was also made to another decision of the High Court in the case as reported in 120 ITR 518 (sic). It was urged that the assessee has to show that, in the year 1971, the investment was made out of the taxed income and the assessee has failed to show that the money was with him prior to January 31, 1971. According to the assessee's learned counsel, it was merely an appreciation of facts and no complicated law point was involved. It was urged that the Department has taken a particular view while others also would be entitled to have a different view from a different angle. It was stressed on behalf of the assessee that the return for the assessment year 1971-72 constituted an evidence and the filing of the same was supported by a receipt and there was no obligation under the law for the assessee to produce a copy of the return or declaration as demanded by the Income-tax Officer. It was urged that the statement in the return and the declaration were valid, referring to the decision of the Supreme Court in the case as reported in CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has failed to establish various claims made by him at various stages and that apart, it was not known whether such declaration or such exemption was claimed in the exemption portion of the return, as no material to that effect was found. It also observed that assuming that such declaration was there, there were no nexus between the amount shown in the exemption portion for the assessment year 1971-72 and the fixed deposits made in the bank, particularly when the findings of the Income-tax Officer were that the fixed deposits were made during the financial year 1971-72, and, in fact, these findings have not been controverted. Accordingly, the Appellate Tribunal, on the facts of the case was of the opinion that Rs. 3 lakhs were deleted wrongly by the Commissioner of Income-tax (Appeals). His order was, therefore, reversed and that of the Income-tax Officer was restored. At the hearing before us, Mr. Sanjoy Bhattacharjee, learned advocate appearing for the assessee, contended that the Tribunal did not consider the questions involved in this reference in the proper perspective. According to him, it is necessary to consider the circumstances prevailing at the material tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different story which is inconsistent with the facts now alleged by learned counsel. There was no whisper about the Bangladesh liberation fighters fraternising with the assessee and giving him the money to hold as their custodian. It was only in the deposition before the Income-tax Officer on May 24, 1978, in the course of assessment, that the assessee first gave out his story of the Bangladesh liberation army taking shelter under the assessee's cover and finally leaving the assessee after the cessation of the liberation war without reclaiming the money. Learned counsel for the assessee sought to persuade us to believe this story going by the proverb "facts are stranger than fiction". We have no hesitation to accept facts to be stranger than fiction. But what we need is that what is asserted is a fact. A fact is a state of reality which is proven and provable and if a state of reality is proved to exist, we would not object to its being stranger than fiction. But here what is being asserted can hardly be taken as a fact. There is no evidence to support its truth. The mere ipsi dixit of the assessee or of learned counsel cannot be taken as a fact. Therefore, the question of its bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessee's claims do. Facts may be strange but never inconsistent or incongruent. The Supreme Court has held that human probabilities have also to be a guiding factor for getting at the truth as science has not invented any instrument as yet to find truth (see CIT v. Durga Prasad More [1971] 82 ITR 540). But what we are being urged to accept defies the basic perception of probabilities of any person of common judgment. We are not, therefore, swayed by what has been submitted on behalf of the assessee. Learned counsel assails the Tribunal's order as one guided by suspicion and conjecture. He further emphasises that the Tribunal says that its conclusion is arrived at, having regard to the surrounding circumstances, while indeed it completely overlooks the actual surrounding circumstances. Such circumstances, according to learned counsel, consist primarily in the fact that the assessee was in possession of the amount at a time when the Bangladesh liberation movement was on. The other circumstance which he considers to be very tangible, is the assessee's claim of having filed a return for the earlier assessment, i.e., the assessment year 1971-72, relating to the previous year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt to assess the amount. It was later invented, secure in the knowledge that the records of the local income-tax office having been gutted in a fire set on by the mob in fury, there is no means for the Officer to call the bluff. This fire broke out in August 27, 1974. The timing of the assessee's claim regarding the filing of the return meaningfully comes only after that incident of fire and destruction of records in the fire. Therefore, the whole claim is spurious and not worth crediting. The purpose of this claim is evident from the second line of argument taken by learned counsel. According to him, inasmuch as the Revenue has failed to dislodge the assessee's claim of having made a return with an entry claiming the receipt of remittance of capital exempt from tax, it remains no more open to the Assessing Officer to assess the assessee's investments by way of fixed deposits in the bank as the money declared earlier to be in his possession affords the source of the investment. He submitted that, in the absence of the records falsifying the assessee's claim, it should be taken as fully satisfactory not calling for any addition under the provisions of section 69 of the Act. But le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking up the return and proceeding to assess the income of the assessee. It was open to him, if there was sufficient justification for it, to hold that the amount noted in the footnote was really the assessee's income in which case an assessable income would have been found and the tax could be charged thereon. If the Income-tax Officer had acted on that return and assessed the assessee before March 31, 1959, the assessment would have been valid". The observations could avail, if the assessee's assertion as regards the filing of the return for the assessment year 1971-72 could be credible. Had he really filed the return, he would have claimed so in 1975 in his deposition. Further, he claimed in his letter dated March 20, 1978, that he had filed that return for 1971-72 on advice. It is not comprehensible why the tax adviser omitted to have a wealth-tax return filed inasmuch as the capital remittance though not income taxable is liable to wealth-tax. The assessee's claim has too many holes and missing links to be coherent and credible. Learned counsel for the assessee relied upon a few other cases. We are not in disagreement with him on the fundamental principle that return, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the assessee did not file wealth-tax return even while acting on the advice of tax experts. Here, we are to go by the dictum "falsus in uno falsus in omnibus". Though applicable in criminal law, it is a sound principle to apply in taxation when the matter is one of finding of fact on the basis of statements of a witness and their judicial evaluation. It is seen that in 1975, the assessee gave a false statement by stating that he had no connection with the bank deposits. Later he makes a volte face and says that the deposits are from the money supposedly declared in 1971. Therefore, the later statements of the assessee cannot be credited as the source of the deposits. Moreover, even if a return was really filed and an entry made in the exemption column showing it as a capital remittance from East Pakistan, that entry is repudiated at the final stage by the assessee himself since his ultimate averment is that it was not capital remittance from East Pakistan but money kept in his custody by persons of Bangladeshi origin. Therefore, this falsifies the entry, as alleged in the return supposedly filed by the assessee. That entry, if it were there together with a return contain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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