TMI Blog1994 (3) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ther companies, viz., Bengal Jute Mills Co. Ltd., Madaripur Trading Co., and Hindustan Mercantile Bank belonged to Messrs. Surajmal Nagarmal Group. One C. L. Bajoria was a senior partner of Messrs. Surajmal Nagarmal and also one of the directors of Bengal Jute Mills Ltd. For the assessment year 1951-52, the assessee had filed his return on May 29, 1952, showing an income of Rs. 15,759. The said return was revised on March 30, 1955. In the revised return an income of Rs. 27,306 was disclosed by the assessee. In the course of the assessment proceedings for the year under consideration, the Income-tax Officer noticed that an amount of Rs. 2,00,000 stood credited to the account of the assessee with the Hindustan Mercantile Bank Ltd., Bombay, on November 2, 1950. The assessee was called upon to explain the nature and source of the said credit. The assessee submitted his explanation and stated that a telegraphic transfer had been received from Messrs. Bengal Jute Mills Co. Ltd., Calcutta, for Rs. 4,00,000 out of which Rs. 2,00,000 was paid in cash and the balance Rs. 2,00,000 was lying in his account. A certificate to the said effect from Surajmal Nagarmal was also furnished to the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and 22(4) of the Indian Income-tax Act, 1922, to the assessee calling upon him to file, inter alia, his total wealth statement (wealth in his own name and in the name of his wife and in the name of his children as on March 31, 1956). In reply thereto, the assessee by his letter dated February 14, 1986, stated that as for the last 30 years or so his income was mainly from salary, no accounts regarding his occasional investments had been kept. In the absence of such account, he expressed his inability to give his exact wealth position as on March 31, 1956. This explanation was not accepted by the Income-tax Officer and he made a summary assessment under section 23(4) of the Act. In the process, he added the said sum of Rs. 4,00,000 to the total income of the assessee as income from undisclosed sources. The assessee applied under section 27 of the Act for cancellation of the summary assessment. The assessee also appealed to the Appellate Assistant Commissioner of Income-tax against the order of assessment and challenged the addition of Rs. 4,00,000 to his income. The application of the assessee for cancellation of the assessment was rejected. The appeal was, however, allowed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Rs. 4,00,000 had been established, the preponderance of evidence on record was against the case set up by the assessee that the said amount was received by him for payment to Messrs. G. Yafi and Sons at Bombay, that it was sent to the assessee by Shri Bajoria on behalf of Bengal Jute Mills Co. Ltd. for payment of that amount to Messrs. Yafi and Sons on account of Madaripur Trading Co. Ltd. in Narayangunj (then situated in East Pakistan) and it was beyond comprehension as to why Shri Bajoria should send the amount to the assessee at Bombay for payment to Messrs. G. Yafi and Sons when that concern had its main office at Calcutta. In view of the above observations, the Tribunal came to the conclusion that the assessee failed to prove that the amount of Rs. 4,00,000 in question received by him had been paid to Messrs. G. Yafi and Sons as claimed by him. The Tribunal, therefore, confirmed the addition of Rs. 4,00,000 to the income of the assessee as his income from undisclosed sources. The assessee applied for reference under section 66(1) of the Indian Income-tax Act, 1922, which was rejected by the Tribunal. The application of the assessee to the High Court under section 66(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht require consideration. According to the assessee, the Tribunal proceeded on a completely erroneous assumption and thereby arrived at a conclusion which is perverse and not sustainable in law. We have carefully considered the above submissions. We have also heard at length learned counsel for the Revenue. We have perused the order of the Tribunal and the various documents annexed to the paper book. We have also carefully gone through the evidence of Shri Bajoria. We find that the Tribunal itself was fully satisfied about the source of the money. The Tribunal has accepted the fact that the money came from Messrs. Bengal Jute Mills Co. Ltd., Calcutta, to Bombay. Messrs. Bengal Jute Mills Co. Ltd., Calcutta, stated before the Income-tax Officer in no less clear terms that it had remitted the same to Bombay by T. T. for payment to some party on its behalf. The services of the assessee were availed of only for the limited purpose of ensuring payment to the proper person. In such a situation, there is no justification to treat the same as undisclosed income of the assessee. If the Income-tax Officer had any doubt or suspicion about the identity of the person to whom the money was pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under : "In accordance with your request, we have despatched a telegraphic, message (using our cypher code as required) to our Bombay office to pay the sum of Rs. 4 lakhs to Shaligram Chowdhary." On a careful perusal of the above entry along with the voucher and the memo set out above, the Tribunal held that: "There is no doubt in our mind that there was only one transaction of Rs. 4 lakhs on October 30, 1950, and not two transactions of Rs. 4 lakhs each as held by the income-tax authorities. The oral examination given by the assessee before the income-tax authorities might have created suspicion in their minds but that would not justify us to make an addition of Rs. 4 lakhs as done in the present appeal. The books of account maintained by the assessee as well as the voucher. and memo in question are all contemporaneous evidence and cannot be doubted. As we are fully satisfied with the evidence on behalf of the assessee that there was in fact only one transaction of Rs. 4 lakhs on October 30, 1950, we delete the sum of Rs. 4 lakhs treated by the income-tax authorities as the assessee's income from 'undisclosed sources'." The above order of the Tribunal in the case of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome liable to tax in the hands of the assessee. Reference may also be made in this connection to the decision of the Supreme Court in Kishinchand Chellaram v. CIT [1980] 125 ITR 713. In this case, certain telegraphic transfers were made by an employee of one office of the assessee to an employee of another office of the assessee. An inference was sought to be drawn by the Department that the amount was income of the assessee. The Supreme Court held that from the facts that remittance was made by an employee of the assessee from Madras and received by its another employee at Bombay, it did not follow that it was on behalf of the assessee. It was held that the burden was on the Department to prove that the money belonged to the assessee by bringing proper evidence on record and the assessee could not be expected to call the concerned persons in evidence to help the Department to discharge the burden that lay upon it. The Supreme Court held that there was no evidence on the basis of which the Tribunal could come to a finding that the sum remitted by its employee was remitted by the assessee and it represented the undisclosed income of the assessee. The facts of this case are very mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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