TMI Blog1962 (12) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... al was stated to have been borrowed from various parties. The Income-tax Officer accepted the evidence as to all but the source for the sum of ₹ 25,000. 3. The explanation preferred as to this sum was that it had been borrowed from Vijayaram Ganeshdas of Bikaner. This person, through his agent, Gourishankar Bagdy, got a draft on 26th July, 1947, on the Punjab National Bank, Jodhpur. This was sent from Bikaner to Jodhpur. In the books of Phalodi, on Sravan, Duwjh, Vadh, this was deposited, and that by cashing this draft, ₹ 16,000 was put in as fixed deposit at Jodhpur itself, that ₹ 8,000 was sent by cheque to Poonamchand Gulabchand of Bombay and ₹ 1,000 spent otherwise. Against the security of the deposit at Jodhpur, a loan of ₹ 15,000 was taken from the Punjab National Bank, Coimbatore, by the assessee. The other ₹ 10,000 was explained before the Income-tax Officer as having come from Sagarchand Sujammal of Madras, on the security of a similar amount with them at Phalodi. But later on, by letter dated 23rd September, 1958, to the Appellate Assistant Commissioner, this explanation as regards ₹ 10,000 was rescinded and it was stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished proof of cash being available at Phalody for repayment on 20th August, 1949; (iv) that there was no contemporaneous evidence of the loan either from the creditor, intermediaries or any other source; (v) that the assessee had not been able to give the address of Vijayaram Ganeshdas even though he borrowed such a large sum from him and that the credit had not been proved; and (vi) that no mention was made of the Phalody books before 23rd September, 1958. 6. The learned counsel for the assessee urged that Gourishankar Bagdy was an agent of Vijayaram Ganeshdas, on whose instructions he had drawn ₹ 25,000 on his own account; got a draft and sent it to Jodhpur which was cashed and given to the assessee at Phalodi and that out of this sum ₹ 16,000 was deposited at Jodhpur in fixed deposit on the strength of which the Coimbatore branch of the Punjab National Bank advanced ₹ 16,000. He relied very much on the letter of Punjab National Bank, dated 14th March, 1955, speaking to this transaction. When confronted with the question of the evidence, if there was, of Gourishankar Bagdy being the agent of Vijayaram Ganeshdas, it was conceded that there was no w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee from undisclosed sources for the year 1948-49. The assessee preferred an appeal to the Appellate Assistant Commissioner, who, however, disagreed with the Income-tax Officer. In his opinion the Income-tax Officer was not justified in suspecting the assessee that he must have earned the money from an undisclosed source. He therefore deleted the addition of ₹ 25,000. The department preferred an appeal to the Income-tax Appellate Tribunal, which agreed with the Income-tax Officer and set aside the decision of the Appellate Assistant Commissioner. This court directed the Tribunal to draw up a statement of the case and to refer the question set out above. It must be noted that the proceedings under section 34 were started in the year 1957 calling upon the assessee to explain a capital credit in his favour in the books of account for Hastimal Jayantilal and Co. made in the year 1947. The difficulty on the part of any assessee to explain a transaction which is a decade old has to be borne in mind by the department and should under no circumstances be under-estimated or taken advantage of by them. Now the question is whether the assessee has explained, as reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,000 from Vijayaram Ganeshdas. The cheque in favour of Poonamchand was dated 8th August 1947, but the debit in favour of Poonamchand in the firm's accounts is dated 13th November, 1947. There is an interval of about three months between the date on which it is alleged that Poonamchand was paid by the assessee and the date on which the assessee obtained the credit at Coonoor. Nor is there anything to show apart from the assessee's own statement that this ₹ 8,000 formed part of his borrowing from Vijayaram. As stated already, the assessee's first version explaining the ₹ 10,000 contributed to the firm was totally different from the second version. We are not prepared to say that the Tribunal had no materials to disbelieve this part of the assessee's explanation. But the case of assessee in regard to the contribution of ₹ 15,000 stands on a firm basis. It is not disputed that he borrowed this money from the Punjab National Bank, Coimbatore, on the strength of the deposit receipt in his favour of the sum of ₹ 16,000 with the Punjab National Bank at Jodhpur. It is true that the bank draft which the assessee cashed at Jodhpur was given to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that he contributed ₹ 15,000 having got it from the Punjab National Bank at Coimbatore seems to be true supported as it is by documentary evidence. The Tribunal however has not chosen to accept the assessee's case on grounds which we are unable to appreciate. The Tribunal commenting upon the fact that the books of account of the assessee were kept only at Phalodi, that pakka and katcha roker of the assessee at Phalodi had not been produced, and that the necessary link between the borrowing of Vijayaram and the money brought to Coonoor had not been established. As stated already, with regard to the sum of ₹ 15,000, the assessee produced indisputable documentary evidence to show that the amount came out of his borrowing at Jodhpur whether it was from Vijayaram Ganeshdas or from Gowri Shankar Bagdy. The assessee has been able to point out a source for this sum of ₹ 15,000 and this cannot be refuted by a mere steady disability on the part of the department or the Tribunal. After the lapse of ten years the assessee should not be placed upon the rack and called upon to explain not merely the origin and source of his capital contribution but the origin of origin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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