TMI Blog1965 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... as disclosed from the statement of the case submitted by the Tribunal, are briefly as follows: The reference in question relates to the income-tax assessment for 1958-59, the relevant accounting year being the year ending on April 12, 1958, corresponding to 2014 R.N. The assessee, hereinafter referred to as the petitioner in this reference, is an individual. He is a partner in two registered firms, one of which is Messrs. Motilal Inderchand, Calcutta, with which we are concerned. During the assessment proceedings for the year in question, the Income-tax Officer noticed an item of ₹ 10,000 bearing date April 23, 1957, appearing in the personal account of Smt. Munni Devi Daga, the wife of the petitioner, in the books of the firm, Messrs. Motilal Inderchand. It was also found that at the end of the accounting year, a sum of ₹ 719 had been credited to this account of Smt. Munni Devi Daga towards interest. While making the assessment order, the Income-tax Officer noted that the petitioner was unable to explain the source of this deposit in the name of Smt. Munni Devi Daga on being called upon to do so, and thereupon the Income-tax Officer treated this amount as an item of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is substantiated not only by the entries in the firm's accounts but also by the declaration made by the depositor, there is abundant evidence to establish that the deposit related to the monies belonging to Smt. Munni Devi Daga, who had made the deposit and that, in the absence of any evidence on record to the contrary supplied by the department, the Tribunal was not justified in treating the said deposit as the money belonging to the petitioner and derived from undisclosed sources. Mr. Ghose further took strong exception to the Tribunal taking into consideration the circumstance that a similar deposit was made by another lady on the same day, which, he contended, was totally irrelevant in determining the true nature of the deposit made by Smt. Munni Devi Daga. He further contended that when an entry in the accounts of the firm showed that an amount was deposited by a third person, this itself affords a prima facie proof that the money belonged to the person in whose name the account stood and that the deposit was made by her in the absence of any proof to the contrary. In such circumstances, he pointed out, the burden lay on the department to prove that the money which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere fact that the third party making the deposit happens to be the wife of the assessee does not ipso facto make the assessee come into the knowledge of the sources from which the money was realised. Under law, in the absence of specific proof of that knowledge, it cannot be assumed that the assessee has the knowledge in question within the meaning of section 106 of the Evidence Act. In order to rely on this section, which lays down that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him, it must be established first that the person has especial knowledge of that fact, having regard to the circumstances of the case. As illustration (b) to the section shows, when A is charged with travelling on a railway without a ticket, the burden of proving that he had a ticket is on him, obviously, because it is he alone that would have especial knowledge regarding the possession of the ticket. The instant case is by no means a parallel and, in our opinion, section 106 of the Evidence Act cannot, therefore, be invoked in aid. It would appear that the accounts of the firm which had been produced in the case had been accepted and acted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason, the fact that somebody else made a similar deposit on the same day is, in our opinion, totally irrelevant in deciding upon the nature of the deposit made by Smt. Munni Devi Daga. The Tribunal, in our opinion, therefore, was not justified in relying on the circumstance as a piece of evidence against the petitioner. Undoubtedly, it is not a material at all on which the Tribunal could base its decision. In this connection, Mr. Ghose placed reliance on a Division Bench decision of this court in Nabadwip Chandra Roy v. Commissioner of Income-tax [1962] 44 I.T.R. 591, wherein it was held that in cases where the amount is shown to have been deposited by a third party, prima facie, it cannot be regarded as a receipt by the assessee--much less a taxable income--and in that event it is for the department, if they want to tax it as an income of the assessee, to show by some materials that the amount standing in the name of third party does not belong to that third party but belongs to the assessee. It was further held by the learned judges in that case that by merely holding that the assessee has not established the source of receipt of that amount by the third party, the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This case has no application to the facts of the instant case, where the money in question stood in the name of a third party and not in the name of the assessee. Mr. Pathak placed reliance on the decision of the erstwhile Andhra High Court in P.V. Raghava Reddi v. Commissioner of Income-tax [1956] 29 I.T.R. 942, which is clearly a case distinguishable on the facts of that case, in support of the proposition that the question of burden of proof cannot be made to depend exclusively upon the fact of a credit entry in the name of the assessee or in the name of a third party and that, in either case, the burden lies upon the assessee to explain the credit entry. But the learned judges constituting the Bench in that case were conscious of the fact that the onus might shift to the department under certain circumstances. This is clear from the following quotations which their Lordships extracted in their judgment, occurring at page 948, from Radhakrishna Behari Lal v. Commissioner of Income-tax [1954] 26 I.T.R. 344. But the position is different in regard to a sum which is shown in the assessee's books in the name of a third party. In such a case, the onus of proof is not upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 810; A.I.R. 1959 S.C. 248.. The particular passage on which reliance was placed occurs at page 249 and is as follows: There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. In that case, their Lordships of the Supreme Court were satisfied with the conclusions to which the Appellate Tribunal came, as appearing to them to be amply warranted by the facts of that case and consequently called for no interference. On the facts of that case, it would appear that certain amounts appeared in the account books of the firm, of which the assessee was a partner, as credits from him. This clearly distinguishes the facts of the instant case where the credit is in the name of a third party and not in the name of the assessee. The last case on which Mr. Pathak placed reliance is the one in Homi Jehangir Gheesta v. Commissioner of Income-tax [1961] 41 I.T.R. 135; [1961] 1 S.C.R. 770, apparently, in support of the proposition that the order of the Tribunal was t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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