TMI Blog1962 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ial facts and the proceedings started under section 34(1) of the Income-tax Act were justified and valid in law? (2) Whether there was any material evidence or basis on record to support that the sum of ₹ 1,18,000 was secretly invested in the business during the years 1942 to 1946 and the estimate of profits at ₹ 60,000 was justified and if so whether the entire sum of ₹ 60,000 can be taxed during the year under consideration? The facts as disclosed in the statement of the case are that the Hindu undivided family, styled Bhimaraj Chouthmal , whose karta is Chouthmal Agarwalla, was assessed for the year 1946-47, the corresponding accounting year being 2002 R.N., as Hindu undivided family, for ₹ 29,761. Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thus the Income- tax Officer assessed the assessee on this amount of ₹ 60,000. The Appellate Assistant Commissioner whose order was affirmed by the Appellate Tribunal has come to the conclusion that the assessee has failed to prove the source of ₹ 1,18,000 with which the assessee purchased the bank draft at Jaipur and brought it to Dibrugarh. As the assessee has failed to prove the source of this amount, the Appellate Assistant Commissioner has estimated the profit to be ₹ 60,000. The Appellate Tribunal has affirmed the order of the Appellate Assistant Commissioner. The contention raised by the assessee's counsel before us is that there were no facts on the record to show that the Income-tax Officer had reasons t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account books of the Hindu undivided family were before the Income-tax Officer when the first assessment was made. In the account books of the joint family firm the sum of ₹ 1,18,000 was credited as follows: 1. ₹ 50,000 in the account of Chouthmal. 2. ₹ 35,000 in the account of the mother of Loknath. 3. ₹ 33,000 in the account of Mahadevi Agarwallini. The case of the assessee was that a sum of ₹ 1,33,000 was taken by Chouthmal to his home town in Rajasthan as there was fear of Japanese invasion in the year 1942. This sum was kept there and ₹ 15,000 out of the said amount was spent and when the situation eased ₹ 1,18,000 was brought back to Dibrugarh and credited in the account of the Hin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is that there is no material in the record from which it can be inferred that the sum of ₹ 1,18,000 was secretly invested in business during the years 1942 to 1946, and that the estimate of profits at ₹ 60,000 was justified. In our opinion, this contention must be accepted. There is no evidence to show that this amount of ₹ 1,18,000 was secretly invested; nor is there any material to show that the profit from the investment of ₹ 1,18,000 could be ₹ 60,000 in the accounting year. In fact, as we have already pointed out, there is indifference in the approach to this question both by the Appellate Assistant Commissioner and the Income-tax Officer. The Income-tax Officer has taxed the sum of ₹ 60,000 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing such an inference. It is then urged by the counsel for the department that the point that ₹ 60,000 could not have been the profit from the investment of ₹ 1,18,000 during that year was never raised before the Tribunal and thus it is not a point which arises out of the order of the Tribunal. The point, as will appeal from the points argued before the Appellate Assistant Commissioner, was raised. Apart from it, the whole question which the Tribunal was considering was whether the profit of ₹ 60,000 was justified or not. One of the reasons given for it not being justified was that the assessee could not have earned this profit of ₹ 60,000 during that year and it cannot, therefore, be said that the point was not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised before the High Court. In the present case, the point all along raised y the assessee was that the assessment of ₹ 60,000 was not justified. A further point was also raised all along that there was no material to show that the assessee could have made a profit of ₹ 60,000 out of the investment of ₹ 1,18,000 during that year. If the profit was not made during the accounting year, it could not have been liable to assessment. It is also significant to note that the amount was deposited in the bank account of the Hindu undivided family towards the end of the accounting year and if the money was invested after it was brought to Dibrugarh it could not have yielded profit to the extent of ₹ 60,000 during that year. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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