TMI Blog1990 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... SABYASACHI MUKHARJI CJI.- This is an appeal by special leave from the judgment and order of the Madras High Court dated March 9, 1977. The appeal involves the assessment of income-tax under the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1966-67. The assessee is an individual who carried on business in the distribution of films. For the assessment year 1966-67, the assessee filed return of income on July 12, 1968, declaring "No loss". Subsequently, the assessee filed a revised return on January 4, 1969, declaring a net loss of Rs. 9,490. The Income-tax Officer called for wealth statements from the assessee. The wealth statements did not reveal that the assessee had invested any amount in a plot of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessee's own statement recorded on October 9, 1972, that the on-money payment was made by him. The assessee filed an appeal to the Tribunal and contended that, in case of rejection of the assessee's explanation for the source, the addition could not be held to be the concealed income of the assessee, and relied on certain principles laid down by the courts. The Tribunal allowed the appeal. It is necessary to refer to the relevant portions of the Tribunal's order in respect of which certain contentions were urged before us. The Tribunal, in its order, had observed, inter alia, as follows : "We have considered the rival submissions. At first, we were impressed by the argument of the Departmental representative that it is a fit c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee for payment towards the extra money paid. However, rejection of explanation even on the ground of falsity will not mean that the addition represented the assessee's income and more so of the concealed income of the assessee. In fact, the assessee has not accepted the addition before the Income -tax Officer though he has not gone on appeal for reasons best known to him. Whatever it is, there was no acceptance that the addition represented the concealed income. Having regard to all these, we are of the view that the assessee's case falls within the ratio of the decisions in CIT v. Anwar Ali [1970] 76 ITR 696 (SC) and CIT v. Khoday Eswarsa and Sons [1972] 83 ITR 369 (SC). In view of what we have expressed above, we find no rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the assessee was not adequate, surplus cash balance and the additional payment, if any, should be deemed to have come out of such surplus fund and not out of any undisclosed fund. The Income-tax Officer found himself unable to accept the said explanation for the reason that the statements of receipts and payments filed by the assessee only enabled him to reasonably connect some of the payments, but the said statement could not serve the purpose of a regular cash book disclosing such cash balance, as the assessee's personal expenses were not shown in the statement. If these were taken note of, the surplus, if any, would be wiped off. In the end, he came to the conclusion that the assessee had not accounted for the full consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the amendment of 1964, the onus was on the Revenue to prove that the assessee had furnished inaccurate particulars or had concealed his income. Mr. Ahuja, appearing for the Revenue, urged before us that difficulties were found in proving the positive element required for concealment under the law prior to the amendment and this had to be established by the Revenue. He drew our attention to the observation of this court at page 20 of the report where this court reiterated that the effect of the Explanation was that where the total income returned by any person was less than 80% of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation for the excess and that that was the end of the matter. No question of law arose thereafter, according to him. It is true that the presumption that arose was a rebuttable presumption that there was concealment of income and if there was cogent material to rebut the evidence that was acceptable, then the presumption would not stand. In the instant case, the falsity of the explanation given by the assessee has been accepted by the Tribunal. The Tribunal stated that, in the instant case, no doubt the Income-tax Officer was justified in saying that not only the explanation, was not convincing but false because there was no cash available to the assessee for payment of the extra money paid. Therefore, no explanation was put forward a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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