TMI Blog1951 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequence the turnover was estimated at ₹ 4 lakhs and by applying a flat rate of 6 per cent, profits were assessed at ₹ 61,803. This finding of the Income-tax Officer was upheld at the appellate stages and is not now in dispute. To the income of ₹ 61,803 as ascertained above, another sum of ₹ 90,000 was added. This sum is composed of moneys received by the encashment of high denomination notes of ₹ 1,000 each. The total sum received by encashment on 21st January, 1946, in different names was larger. Out of a total of 143 notes 97 were encashed by Gobardhandas Agarwalla, the karta of the undivided Hindu family, 40 notes of ₹ 1,000 each were encashed by Sreemati Narbadi Agarwalla, wife of Gobardhandas Agarwalla, and 6 notes were encashed by his driver Sorju Singh. In the view of the Tribunal the assessee could give reasonable explanation for about 47 notes encashed by him. The balance of ₹ 50,000 for which no reasonable explanation was offered was added to his estimated income of ₹ 61,803 as income from undisclosed sources. The assessee is not questioning this finding of the Tribunal also. The sum of ₹ 40,000 which was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention has given rise to the following question: Whether there was any material before the Tribunal on which the Tribunal could have come to the conclusion that the sum of ₹ 40,000 being the proceeds of 40 high denomination notes encashed by the assessee's wife really belonged to the assessee and is therefore income of the assessee from undisclosed sources and taxable under the Indian Income- tax Act? The question as framed by the Tribunal assumes that, if there was material for the finding that the sum of ₹ 40,000, the proceeds of the 40 high denomination notes, to which it refers, belonged to the assessee, it represented his income from undisclosed sources. No objection was raised by the Department to the question as framed. The Tribunal has stated in para. 14 of the statement of the case that the Department had no suggestions to make in regard to the draft statement of the case that was sent to it. It follows therefore that if it is found that the finding that the sum of ₹ 40,000 belonged to the assessee is based on some material, it will be his income from undisclosed sources. All that has to be seen therefore is whether there was any mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year was 1946. Huge profits could be made by utilizing this money in the accounting period that preceded it. It could have been put in the firms' business. Sreemati Narbadi Agarwalla the wife of the assessee admittedly had accounts with the firm. The books disclosed a sum of ₹ 708-8-9 to her credit. She had no reasons for keeping high denomination notes as the husband had; for in her hands it would not be concealed income of the accounting period or of any one year if the assessee's story is believed. He undoubtedly was concealing income. The wife would have no such motive. If the same mode of keeping the money was adopted by her, the possibility that this money also belonged to the husband is very strongly suggested. Before the Assistant Commissioner of Income-tax the assessee conceded that he and his wife had no evidence to give in support of the contention raised by him. As such a large sum was alleged to have been received by his wife even though on different occasions, it should have been possible for the assessee to produce some evidence on the point. He as it were abandoned the attempt by stating that the family had no evidence to produce on the point. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ami character of the transaction would in its nature be mostly circumstantial. Mr. Lahiri has relied on two cases from the Patna High Court in support of his contention. In Ramkinkar Banerji v. Commissioner of Income-tax, Bihar and Orissa [1936] 4 I.T.R. 108, it was held that there was no presumption that the property standing in the name of a married Hindu lady does in fact belong to her husband. This proposition is undisputed. As held above there is no dispute about onus in this case. The second case relied on by him is reported in S.N. Ganguly v. Commissioner of Income-tax, Bihar and Orissa [1953] 24 I.T.R. 16. In that case the question was very much the same as we have before us. The facts found were however different. There was an affidavit in that case from the wife that she had an independent source of income which was a house property fetching a rent of ₹ 70 per month. The wife had also alleged that she had been receiving presents in cash from her relatives. There was nothing to show that the Income-tax Appellate Tribunal rejected that explanation. In view of these facts it was found that there was no material before the Income-tax authorities justifying the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in these circumstances it is urged it is the income of the business which the assessee is carrying on, it would be blowing hot and cold in the same breath, as for purposes of income-tax assessment the income is from undisclosed sources and for purposes of excess profits tax it is income from the business. The two finding are conflicting in nature. Besides there is absolutely no evidence for a finding that the sum of ₹ 90,000 represented the income of business that the assessee was carrying on. This could not be presumed. Even here the onus would be on the Department to show that it was the income of the business. If that finding had been arrived at on any evidence, it would have resulted in a higher estimate of the income of the assessee. In any case as thing are, it is not possible to say on the facts and in the circumstances of the case that the sum of ₹ 90,000 which has been held to be assessee's income from undisclosed sources is liable to excess profits tax. The answer to the question is in the negative. It is not necessary to consider the third question which has been included in the reference on a hypothetical basis. The answer to the question in para. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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