TMI Blog1954 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... m interest on securities, property, dividends, bank interest and director's remuneration from Basuria Coal Company. The assessee was assessed on the following total incomes for the assessment years 1943-44, 1944-45 and 1945-46 : 1943-44 Rs. 17,502 1944-45 Rs. 21,000 1945-46 Rs. 39,532 For the assessment year 1946-47, the assessee had been assessed under section 23(3) of the Act on a total income of Rs. 32,689. Subsequent to the completion of this assessment the Income-tax Officer received information to the effect that assessee had encashed high denomination notes of the value of Rs. 28,000 on the passing of the High Denomination Bank Notes (Demonetization) Ordinance, 1946. The Income-tax Officer thereupon initiated proceedings under section 34 of the Act. The assessee filed the return of income in response to the notice under section 34 of the Act and admitted therein the income which had already been assessed on him under section 23(3) of the Act. In a letter accompanying this return, the assessee stated that the high denomination notes were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this sum had been kept in high denomination notes. The Appellate Assistant Commissioner was not satisfied with the assessee's contention that he had been keeping a large amount of cash at home. The Appellate Assistant Commissioner considered that the high denomination notes represented the assessee's income from concealed sources. He therefore confirmed the inclusion of the sum of Rs. 28,000 in the assessee's total income. A copy of the order of the Appellate Assistant Commissioner is annexure E and forms part of the case. The assessee appealed to the Appellate Tribunal and contended that of the 28 notes encashed by him, 15 notes had been received by him from the Busserya Coal Company Ltd., of which the appellant was a director and shareholder. As this contention was raised for the first time before the Tribunal and as the Tribunal felt that it should be verified, the Tribunal remanded the case to the Income-tax Officer. The Tribunal also directed that the assessee should be given a further opportunity to prove the source of the balance of 13 notes. A copy of the remand order of the Appellate Tribunal is annexure F and forms part of the case. The Income-tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The whole argument proceeded on the footing that the value of the high denomination notes whose source had not been satisfactorily explained by the assessee, could be included in the assessee's total income as secreted income. That is the reason why the Tribunal did not give any detailed reasons for its conclusion that the sum of Rs. 13,000 represented the assessee's secreted income of the previous year. We would, therefore, state here why the Tribunal came to the above conclusion. The correctness of the assessee's explanation regarding the source of the high denomination notes was carefully gone into by the Tribunal and after consideration of the evidence the Tribunal determined the amount whose source the assessee was unable to prove. As stated already the Tribunal found that the assessee had not established the source of the sum of Rs. 13,000. To the extent there was an unexplained increase in the assessee's wealth. As the encashment of the notes took place during the course of the previous year this unexplained increase in the assessee's wealth of Rs. 13,000 had occurred in the course of the previous year. In the absence of satisfactory evidence to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation but held that the case should be remanded back to the Income-tax Officer with a direction that the claim should be investigated after examination of the books of the Busserya Coal Company to whom Rs. 1,000 notes were actually paid by the Hongkong and Shanghai Banking Corporation. An enquiry was held by the Income-tax Officer and the matter again came up before the Income-tax Appellate Tribunal for the determination of the question whether the assessee had given sufficient explanation of the source of the entire amount represented by high denomination notes or portion thereof. After a comparison of the numbers of notes given by the Hongkong and Shanghai Banking Corporation with the numbers in the declaration made under the Demonetisation Ordinance the Income-tax Appellate Tribunal took the view that there was an agreement with respect to 15 notes. The Appellate Tribunal, therefore, accepted the explanation of the assessee with regard to Rs. 15,000 out of the total amount of Rs. 28,000 which represented the value of the high denomination notes. As regards the balance of Rs. 13,000 the Appellate Tribunal held that the explanation furnished by the assessee was insufficient and R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome character. The question, therefore, arises whether in the present case the assessee has discharged the onus which lay upon him of showing that this amount of Rs. 28,000 was not liable to be taxed. It is true that Mr. Gupta showed in the course of argument from the bank pass book that for the period from 1937 to 1945 the assessee withdrew a sum of Rs. 57,000 from his account in the Lloyds Bank. It is admitted that the assessee does not maintain any home chest account. Mr. Gupta further admitted that he did not produce before the Income-tax authorities materials to show what was the disbursement for the various years out of the total of Rs. 57,000 which the assessee had withdrawn from the Lloyds Bank. The difficulty in the way of the assessee is that unless we are shown what the amount of disbursement is for the various years, it is impossible to arrive at a finding that on the material date, that is, on the 19th January, 1946, the assessee had in his possession sufficient cash balance representing the value of high denomination notes which were being encashed. It is possible that the quantity of disbursement may be such that the amount of cash balance was Rs. 28,000 on the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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