TMI Blog1970 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... u undivided family represented by Ramnath Daga and the assessments are for the assessment years 1947-48, 1948-49 and 1952-53 to 1956-57. Ramnath Daga was at the material time the karta of the assessee Hindu undivided family and Surajbai is his second wife. Previous to these assessment proceedings, there were assessment proceedings for the assessment years 1945-46 and 1946-47 also. The original assessment for the assessment year 1945-46 was made on March 13, 1946. Subsequently proceedings under section 34 of the Income-tax Act, 1922, were started against the assessee, Seth Ramnath Daga, and notice under section 34 was served on its karta on March 16, 1954. The notice under section 34 was issued to the assessee as the department considered that the assessee had escaped assessment and it was discovered that the assessee had not in the original assessment disclosed several amounts and particularly those which stood in the name of the karta's wife, Surajbai, either in the shape of shares or deposits in the banks or immovable property, such as a house at Ganganagar and a house at Nagpur. The assessee was asked by the department to explain the sources from which the properties were taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order dated 18th January, 1955. To put the reasons in his own words, he says : " I cannot accept that for years together the assessee was keeping huge idle funds at home which was both uneconomic and risky. The assessee was paying heavy interest to the firm on the withdrawals. The funds could have been deposited in bank and could be a source of substantial recurring income. The investments are mostly made during the period of war when merchants reaped huge profits from different sources. The assessee has huge speculative business. It is also not possible to connect any particular withdrawals with a succeeding investment made in the name of Smt. Surajbai. Moreover, the withdrawals must have been made for some specific purpose and spent over it. There is also no personal account of the lady or any central set of account books to show as to how the amounts withdrawn were expended and how much of the withdrawals remained with the assessee so as to be available for investment in the name of the lady. Even there is no record to show the source of monies alleged to have been received by the lady on ceremonial occasions. As a large sum was alleged to have been received by the lady on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no presumption in favour of advancement or gift such as is there in the English law. He found that there was no material on record to show that the karta's wife was possessed off funds of her own to make the impugned investments. The Tribunal referred to the different explanations and the stand taken by the assessee with respect to these investments and also referred to the entries in the account books of the firm and observed that no mention was made of any gift of Rs. 1,50, 000 by the karta to his wife out of his capital in the Bikaner books. In view of the explanations given by the assessee which, according to the Tribunal, were varying and the improbability of the story put forward, the absense of satisfactory explanation for the wife to start an account book all of a sudden in Samvat year 1996 and in the absence of any material to show that the wife of the karta was possessed of funds of her own, the Tribunal confirm the assessment made by the Income-tax Officer a confirmed by the Appellate Assistant Commissioner. Similar view was taken for the assessment 1946-47 also. So far as the assessments in question are concerned, a similar stand was taken by the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Perianna Pillai v. Commissioner of Income-tax, Kaniram Ganpat Rai v. Commissioner of Income-tax, Tejmal Bhojraj v. Commissioner of Income-tax, Omar Salay Mohamed Sait v. Commissioner of Income-tax, Abdul Caffoor Trust v. Commissioner of Income-tax, Colombo and Joint Family of Udayan Chinubhai, etc. v. Commissioner of Income-tax. In Kaniram Ganpat Rai v. Commissioner of Income-tax, it was held by the High Court of Patna that the Income-tax Officer is not bound by the rule of res judicata or estoppel and he can reopen the assessment if fresh facts came to light which on investigation would entitle the officer to come to a conclusion different from that of his predecessor. Similarly in Tejmal Bhojraj v. Commissioner of Income-tax, it has been held that the principle of res judicata or estoppel by record has no application and the previous finding or decision may be reopened by the department when the previous decision has not been arrived at after due the said decision is arbitrary or fresh facts come to light. In view of his the assessee in a subsequent year is able to satisfy the income-tax authority that the previous finding is not correct either because it was not arrived at aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd remained with the karta's wife as gifts from the asessee from time to time during that period. This statement is quite vagure and does not lead one anywhere. It is not known for what purpose these amount withdrawn were spent by the assessee. In fact, the assessee's agent, one Durgaprasad Rao, had stated before the Income-tax Officer that "it was not possible to furnish evidence and prove how the borrowings from R. B. Bansilal Abirchand Firm were spent by the assessee. They must have been partly on private account and partly for business purposes". If an explanation with respect to a particular item of amount is given by the assessee, then that explanation must be substantiated by satisfactory evidence. This explanation given by the assessee is so vague and general that it is not possible to accept the said explanation and to come to a conclusion that out of this amount, a large amount or any amount must have been given by the karta to his wife as gifts from time to time. It was also sought to be explained that the karta's wife had received gifts from her parents and other relations at their marriage and marriages of their brothers and relatives in the father's family and cerem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see's wife. Then there are other improbabilities in the case and the conduct of the assessee and his wife which cannot be termed to be a normal prudent conduct. These are the various circumstances which could be taken into consideration to find out the nature of the transaction. Even with regard to the amount for household expenses said to have been given by the karta to his wife, Surajbai, the same thing can be said. It is alleged by the assessee that an amount of Rs. 1,38,142 was incurred and spent through the assessee's wife for household expenses and only an assertion has been made that out of this amount his wife must have made some savings. This again is too vague a statement to be accepted. If the household expenses are being incurred through the instrumentality of the wife, it cannot be said, in the first instance, that there must have been some savings out of the same. It is not the case of the assessee that every month or periodically a fixed amount was given to the wife for meeting the household expenses and whatever remained at the end of the period after meeting the household expenses was to remain with the wife and the assessee would not ask for any account of the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration by the income-tax authorities they could reasonably come to the conclusion which they have reached. It cannot, therefore, be said that this was a case where there was no material to hold that the amount of Rs. 2,00,000, which was subsequently invested in purchasing a house at Ganganagar and put in fixed deposits in the banks or invested in the shares, belonged to the assessee-family. The second part relates to an amount of Rs. 1,50,000 out of which a house at Nagpur has been purchased and the balance of Rs. 22,399-12-9 is said to have been paid in cash to the karta's wife, Surajbai. It is the assessee's case that an amount of Rs. 1,50,000 was transferred by the karta from the capital account on Kartik Badi 8, Samvat year 2001, corresponding to October 9, 1944, to his wife, Surajbai. It appears that this transfer entry was made by the assessee in his account books and was carried forward in the ledger of the year 1944-45, Samvat year 2001-2002. This amount not seem to have been actually handed over by the assessee to Surajbai on October 9, 1944, but having transferred the said amount to her it was kept with him and later out of this amount the house property at Nagpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been placed on behalf of the assessee on four factors : (1) The house property at Nagpur has been purchased in the name of Surajbai. (2) The transaction was entered into through her father who in fact had paid the earnest money of Rs. 30,000 by two cheques of Rs. 10,000 and Rs. 20,000, which was ultimately reimbursed on his drawing a hundi for that amount. (3) There is an entry made in the account books of the assessee wherein this amount of Rs. 1,50,000 is shown to have been transferred to Surajbai and it is out of this amount that the payment has been made towards the consideration of the sale of the Nagpur house, and (4) The balance that was left out of that amount of Rs. 1,50,000 after the payment of the consideration was handed over to Surajbai. It is urged that if the transaction was not a real one in favour of the karta's wife, but was only a benami one, the real owner being the assessee itself, the amount of Rs. 22,000 and odd would not have been paid over to Surajbai and further Surajbai's father, Mathuradas Mohota, would not have paid the earnest money of Rs. 30,000. These are in fact strong points in favour of the assessee's contention that Surajbai is the real owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to the entry in the account books and to the other circumstances which are stated above. In the light of the discussions made above, we do not think that there was any material on record so far as the house property at Nagpur is concerned to hold that though it stood in the name of Surajbai, it belonged to the assessee-family. As per the above discussion, it would follow that, so far as the house property at Ganganagar and the bank deposits as well as the shares are concerned, there is material on record to hold that they belonged to the assessee-family. So far as the house at Nagpur is concerned, there is no material on record to hold that it belonged to the assessee-family. On the findings given with respect to the first question, it follows on the second question that the Tribunal was right in including the income that accrued to or arose in the name of Surajbai Daga out of the amount of Rs. 2,00,000 said to be out of the accumulations in the assessee-family's total income, but was not right in including the income in the assessee-family's total income that accrued to or arose in the name of Surajbai Daga so far as the Nagpur property standing in the name of Surajbai is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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