TMI Blog1963 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the calendar year 1946, the appellant was assessed on a total income of Rs. 3,69,371 which was subsequently reduced to Rs. 2,99,471 by the Appellate Assistant Commissioner. While assessing the appellant, the Income-tax Officer concerned added a sum of Rs. 1,38,000 being the amount of certain high denomination notes encashed by the appellant, as income from undisclosed sources. Being aggrieved by this addition, the appellant appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner asked the Income-tax Officer to prepare from the records in the possession of the department statements of income returned and income assessed in the hands of the appellant for the years 1931 to 1945. These statements were duly prepared. The Income-tax Officer also prepared statements of the capital accounts in the different books of the appellant and the amounts withdrawn by her therefrom, for the assessment years 1936-1937 to 1946-1947. No books of account were, however, available for the year 1944-1945 and for the first four months of 1945-1946, some of these books, it was stated, were destroyed as a result of an explosion which took place in the Bombay docks on April 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal that the sum of Rs. 1,38,000 represented the appellant's income from undisclosed sources ; (2) whether the conclusion arrived at by the Tribunal that the sum of Rs. 1,38,000 was the appellant's income from undisclosed sources was perverse in the sense that no reasonable man could come to it on the materials on record ; and (3) whether the said conclusion was based on conjecture, surmise or suspicion and on a failure to consider relevant evidence in the record. The Tribunal rejected the application holding that no question of law arose out of its order dated May 6, 1959. The appellant then moved the High Court under section 66(2) of the Act for an order directing the Tribunal to state a case on the questions of law which according to the appellant arose out of the Tribunal's order. This application was summarily dismissed by the High Court on March 27, 1961. The appellant then moved this court for special leave to appeal from the order of the High Court dated March 27, 1961. This court granted special leave and the present appeal has been preferred in pursuance of the leave so granted. We should like to make it clear at the very outset that the short question befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons given at the time by her for such encashment, her letter dated November 19, 1957, explaining the sources of her income and withdrawals of cash made by her during the years 19321934 from her businesses, the withdrawals from fixed deposit accounts in three banks in 1942, and the investments made by her in September, 1942, and in 1943-1945. On a consideration of these circumstances, the Incometax Officer posed two questions : (1) whether the appellant was the type of a person who would keep a large part of her savings at home uninvested, and (2) whether the high denomination notes encashed by her represented a part of her alleged accumulated savings from the year 1931. He answered those two questions against the appellant and then held that out of the sum of Rs. 2,38,000 of high denomination notes encashed by her, a sum of Rs. 1,00,000 could at most be treated as representing savings from all sources and, therefore, the balance of Rs. 1,38,000 was income from undisclosed sources. The Appellate Assistant Commissioner and the Tribunal also proceeded on the same lines. The Tribunal said : " Her husband died in 1931, and, under his will, she had admittedly to disburse legacies wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and the sum of Rs. 1,38,000 out of the sum of Rs. 2,38,000 received by the encashment of 238 high denomination currency notes. Assuming that the Tribunal adopted whatever reasons the Income-tax Officer had given in his assessment order, it prima facie appears to us that with regard to the sum of Rs. 1,38,000 the Income-tax Officer has not referred to any particular materials on which he made a distinction between Rs. 1,38,000 and Rs. 1,00,000. The Tribunal did indeed refer to the withdrawals which the appellant made from her fixed deposit amounts in the three banks, the withdrawals amounting to about Rs. 4,00,220 early in 1942. The Tribunal then pointed out that the appellant invested Rs. 2,53,980 in September, 1942, in municipal bonds and Rs. 70,000 in shares in 1943. This was followed by a further investment in 1945 in the municipal debentures. This left a sum of a little over Rs. 76,000 with the appellant. The Tribunal referred to a further investment in municipal debentures of about Rs. 20,000. But the Tribunal did not consider the case of the appellant as regards her having the entire Rs. 76,000 and odd nor her explanation as to the source from which the municipal debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider in detail the various contentions urged on behalf of the appellant. These contentions will require a detailed consideration when the questions of law which arise out of the Tribunal's order will fall for decision. It is sufficient for us to say at this stage that the three questions which the appellant has raised and to which we have made a reference earlier in this judgment are questions of law which do arise out of the Tribunal's order dated May 6, 1959. In coming to this conclusion we have kept in mind the observations made by this court in Omar Salay Mahomed Sait v. Commissioner of Income-tax [1959] 37 I. T. R. 151 (S. C.)., and Homi Jehangir Gheesta v. Commissioner of Income-tax [1961] 41 I. T. R. 135 (S. C.).. We have read the order of the Tribunal as a whole and we are not unmindful of the observation made in the case of Homi Jehangir Gheesta [1961] 41 I. T. R. 135 (S. C.). that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions. We may perhaps add that what we have said in this judgment is meant only to show that certain questions of law arise out of the Tribunal's order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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