TMI Blog1954 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of vermilion and sindoor. The Income-tax Officer rejected the account books of the assessee on the ground that there was no manufacturing account or any stock account maintained by the assessee and verification was impossible. The Income-tax Officer therefore estimated the net profit of the assessee at ₹ 10,877 at a flat rate of 25 per cent. on the amount of the sale. The Income-tax Officer also noticed unexplained cash credits in the account books of the assessee as follows:- A/c Godabari Devi, wife. 27-11-45 ₹ 1,000 A/c Ramawatar, son. 22-11-45 ₹ 7,000 A/c Surajmal, son. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee from a source of business different from that of sindoor and vermilion. The argument of the learned counsel was that the amount of ₹ 15,000 should be treated as an undisclosed profit for the accounting year corresponding to the period from 4th November, 1945, to 24th October, 1946, and not the financial year 1945-46. It was contended by the learned counsel that the onus was upon the assessee to give an explanation as to the source and nature of the cash credit and in the absence of a satisfactory explanation the Income-tax authorities were entitled to presume that the cash credit was a secret income from the same source of business, viz., the business of sindoor and vermilion. I am unable to accept this argument as wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her source. But to accept this argument will really be begging the question itself, for the Income-tax Officer cannot claim a knowledge of the real nature of the cash credits, which is best in the know of the appellant himself. These cash credits appear at the very start of the accounting year, and it is also extremely unlikely that they had their origin in the business, as disclosed in the accounts of the appellant. Therefore, the Income-tax Officer's treatment of the two amounts separately must be upheld. The argument of the assessee before the Appellate Assistant Commissioner was that the cash credit should not be added to the estimated profit of the vermilion account for the purpose of being taxed. The contention was based upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisclosed sources from which the profit of ₹ 15,000 has been held to have accrued to the assessee. It has therefore been found in this case that the amount of ₹ 15,000 was the income of the assessee not from the business of sindoor and vermilion but from some other source. On this basis of fact the Tribunal was correct in holding that the previous year for the income of ₹ 15,000 was the financial year according to section 2(11)(a) of the Income-tax Act. For it is admitted that in respect of this amount of ₹ 15,000 there is no account maintained by the assessee and there is no option exercised on his part. In the absence of any system of accounting adopted by the assessee and in the absence of any option on his part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und in that case that the additional income of ₹ 19,000 was derived from the mica business and the cloth and grain business of the assessee and there was no separate source of income. That was the reason why the Division Bench held that the amount of ₹ 19,000 was liable to inclusion in the assessee's total income for the assessment year 1947-48. In M.J.C. No. 46 of 1953 the material facts are of similar character and the Division Bench proceeded upon the same view as they took in the previous case. It was found as a fact in M.J.C. No. 46 of 1953 also that the income represented by the high denomination notes was income derived from the business of cloth and spices for which the assessee had already exercised his option under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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