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TMI Blog1962 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal in the income-tax appeal clearly being that the sum of ₹ 1,31,957 was income from some undisclosed source, could such income be considered for taxation under the, Excess Profits Tax Act and could the relief consequential to the finding in the income-tax appeal be refused?" The assessee is an unregistered firm. The assessment year in question is 1945-46 and the corresponding accounting year is from April 1, 1944, to January 31, 1945. The account books of the assessee disclosed a credit entry in the month of September, 1944, in the name of one Iswari Prosad Gupta for the amount mentioned. Against this entry was recorded a purchase of timber of the same value and it was alleged by the assessee that it had purchased timb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ronted with the actual circumstances of the case that it came out with this disclosure that there was no person in the name of Iswari Prosad Gupta who was a creditor to the firm but that the amount was introduced as capital. Having failed to prove the genuineness of the account, the assessee cannot now be allowed to raise a question that the amount came only from one of the partners. The amount was introduced several months after the commencement of the business and we can infer from the circumstances that this amount was produced by some undisclosed activities of the firm and as such it must be brought to tax as an undisclosed income of the firm...We find no reason to interfere with the decision of the department in bringing this amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivered. No separate Judgment was delivered in the excess profits tax appeal, the order recorded being "This appeal is consequential to the result of Income-tax Appeal No. 7227 of 1954-55. We have dismissed the said appeal and, therefore, this appeal is also dismissed." We were referred to two grounds of appeal before the Tribunal, which read as follows: "That as no cash credit was found in the books of your petitioner's firm the addition of ₹ 1,31,957 as business income of your petitioners of the year of account is unwarranted and arbitrary in the absence of definite proof that this sum was paid in the year of account from your petitioners' undisclosed business income. For that there is no evidence that your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family under section 23 in regard to six sums aggregating to ₹ 2,30,346 shown in the accounts is sale proceeds of ornaments, the explanation given was that at the partition the jewels of the family were sold in six lots and the amounts realised were invested in the business. This was not accepted and the, Supreme Court came to the conclusion that as the credits were found in the business accounts of the appellant and the explanation as to how the amounts came to be received was rejected by the income-tax authorities, they were entitled to treat the credits as business receipts chargeable to tax. The following observation of Venkatarama Aiyar J., who delivered the judgment of the Supreme Court, relied on by Mr. Meyer, appears at p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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