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Bachhraj Amolakchand Versus Commissioner of Income-Tax, Madhya Pradesh And Bhopal, Nagpur

[1956] 29 ITR 1009 - Miscellaneous Civil Case No. 125 of 1951 - Dated:- 31-3-1954 - Sen And Bhutt, JJ. For the Assessee : J. M. Thakkar For the Commissioner : M. Adhikari JUDGMENT This is an application of the assessee under section 66(2) of the Income-tax Act, 1922, which arises out of the order of the Income-tax Appellate Tribunal in I.T.A. No. 2555 of 1949-50. There is a consequential application (M.C.C. No. 124 of 1951) which arises out of the connected E.P.T.A. No. 450 of 1949-50. This orde .....

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f these entries and accordingly issued a notice under section 23(2) of the Income-tax Act for further information. The explanation of the assessee was that the amount in question represented the sale price of the ornaments of the ladies of the family. This explanation was rejected and the amounts were treated as the assessee's income from undisclosed sources. 3. The assessee was liable to pay a sum of ₹ 75,785 on account of income-tax by the end of March, 1946. It appears that the asse .....

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that the amount of ₹ 40,000 was paid before the alleged sale of the ornaments; (2) that on 27th April, 1946, the assessee sent ₹ 40,000 to the Laxmi Bank and ₹ 50,000 to the Bank; and (3) that the money was not likely to have been brought all the way from Bombay by Amolakchand on his person as alleged. These facts do throw doubt on the story of the sale of ornaments in the absence of an explanation how the amount of ₹ 40,000 was raised on 31st March, 1946, and the amount .....

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sed on reasons and is not, therefore, open to interference. 4. It was, however, contended that before the assessee's explanation was rejected, the Income-tax Officer ought to have made enquiries from the ladies concerned and from the Bombay market or specified the points on which he wanted further evidence. It appears that the Income-tax Officer had first directed the assessee to produce the ladies for examination but later gave up the idea as, in his opinion, no useful purpose was likely to .....

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required on the subject. He requests that the merchant who purchased gold from us and the goldsmith who melted the ornaments be kindly examined on commission under section 37 of the Income-tax Act if the Income-tax Officer is not satisfied with the evidence tendered." It would thus appear that it was left by the assessee to the Income- tax Officer whether or not to examine these witnesses. Under section 23(3) of the Income-tax Act it is initially for the assessee to produce all material ev .....

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rty who credits an amount with him had received it and it is sufficient if the entries in his account books disclose the source of his own receipt. Reliance is placed in this connection on Narayandas Kedarnath v. Commissioner Income-tax, Central [1952] 22 I.T.R. 18. That was, however, a case in which the receipt of money from an outside source was clearly established but the amount was treated as income solely on the ground that the assessee had failed to prove how the parties who had sent the m .....

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the account books is made with the intention to conceal the income. However, as held in Mahabir Prasad Munna Lal v. Commissioner of Income-tax [1947] 15 I.T.R. 393: "There is nothing in law to prevent an inference that a particular receipt is a revenue receipt, provided that that is a reasonable inference and the assessee fails to satisfy the Income-tax Officer or the appellate authority the source from which the money came." In that case there was reason to believe that the person in .....

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