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TMI Blog1970 (2) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure from day-to-day. The cash book is not balanced to cash a matter of fact all the receipts are not noted therein. It shows almost nil cash balance on several days of the year and also negative cash balance. This, clearly shows that the cash, if any, with the assessee is kept secretly. For instance there is a deposit of Rs. 2,000 in Andhra Bank on March 7, 1966. The assessee pleads that this was out of the sum of Rs. 4,728-13-1 realised on February 19, 1955. But, it is to be seen that from February 19, 1955, to March 7, 1956, the expenditure was as much as Rs. 6,503 and the assessee had no balance with him practically to make this deposit." The Income-tax Officer then proceeded to estimate the income of the assessee. Taking into account the amount of prize won by him in 1947 the income received by him in the previous seven years from the money-lending business, the income from other property, the expenditure incurred by the assessee towards his investments and household expenditure, etc., the Income-tax Officer concluded that the assessee must have in his possession capital of Rs. 1,70,000. He treated Rs. 1,50,000 as capital of the money-lending business and estimated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the application of the assessee the Tribunal has referred to us the following question : " Whether, on the facts and circumstances of the case, the Tribunal is justified in sustaining the estimate of one lakh of rupees as the capital invested in money-lending business ? " Sri Venkatappayya Sastry, learned counsel for the assessee, contended before us that the estimate of the income-tax authorities was based on mere suspicion and surmise and that there was no material relating to the year of assessment of the basis of which the income-tax authorities could estimate the capital at Rs. 1,00,000. He submitted that the income-tax authorities were wrong in estimating the capital of money-lending business solely on the basis of the past history of the assessee. In support of his contention the learned counsel relied on Raghubar, Mandalal Harihar Mandal v. State of Bihar and Bansidhar Onkarmall v. Commissioner of Income-tax. In the first case, the Sales Tax Officer rejected the accounts of the assessee and estimated the gross turnover at Rs. 3,00,000 for the quarter. The order did not show that the assessment was made with reference to any evidence or material, but on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to hold that there must in fact have been some concealed income during the accounting year and which is liable to assessment . . . . To base an assessment barely on a presumption relating to capital found to exist in some previous year appears to us to be unwarranted. The income-tax authorities have proceeded on the view that the burden of proof is on the assessee to show that the 'past capital' has disappeared, for which we can find no justification, and we have been shown no authority. It is well settled that the assessment of any particular year must be based not on mere suspicion or bare guess, but on legitimate material from which a reasonable inference of income having been earned during the accounting year in question can be drawn, and that the initial burden of finding such material, however slight, is on the income-tax authorities and not on the assessee. In the present case all the materials before the income-tax authorities are, (i) the existence of 'past capital' and (ii) the fact that the assessee had not filed a wealth statement for the accounting year though called upon to do so. We do not think that these facts are sufficient to shift the burden of proof on to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and capriciously depart from the findings arrived at in past years. If they do so we will certainly interfere in appropriate cases when the matters come to us. But that is not to say that the income-tax authorities can never depart from their previous findings. If new facts come to light or if an Income-tax Officer finds that his predecessor failed to take into consideration some material facts though available he would certainly be entitled to arrive at his own decision unhampered by the decision of his predecessor, of course, after giving due weight to what was said by him. The learned counsel for the assessee relied upon a judgment of Chagla C.J. in H. A. Shah & Co. v. Commissioner of Income-tax. The observations of Chagla C.J. in this case appear to support the view just expressed by us. He observed : " Nor are we satisfied that in order to enable the second Tribunal to depart from the finding of the first Tribunal it is essential that there must be some fresh facts which must be placed before the second Tribunal which vere not placed before the first Tribunal. If the first Tribunal failed to take into consideration material facts, facts which had a considerable bearing upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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