TMI Blog1957 (2) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,222/8/-, which were made in the month of March just before the previous year closed. It was held by the Tribunal that the sums received by the proprietor by these withdrawals in the month of March could not have been available to him for making the deposits which were made earlier. The Tribunal, however, accepted the view that all other withdrawals which had been made earlier by the proprietor could have been availed of by him in order to make the various deposits. Consequently, for the purpose of calculating the amount of deposit which the proprietor had to explain, those withdrawals were deducted out of the deposits. On this basis it was found that the assessee was required to account for deposits amounting to ₹ 1,80,212/-. The assessee on being called upon to submit his explanation presented a statement showing the sources from which he had drawn the money in order to make these deposits. There were various sources amongst which were bank balance available on the first day of the opening of the previous year, realisations made in respect of sales effected during the preceding year and profits for the preceding year. Another source disclosed was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the previous year in question. On this point our attention was drawn to a decision of a Bench of this Court in Mithoo Lal Tek Cband v. Commissioner of Income-tax, U. P., 1953-23 ITR 494: (AIR 1953 All 701) (A), where the law on the question of drawing inferences under such circumstances was explained after a discussion of the cases decided by various High Courts. The view expressed was as follows : An examination of these cases would, therefore, go to show that, if from the books of account of the assessee it appears that during the relevant account period he had received certain sums of money, it is for him to explain from where he got the same, and if his explanation is accepted there is an end of the matter. The question then might arise, which would be in most cases a question of law whether the assessee's claim that the receipt--its true source being known--is not taxable income is justified or not. Where, however, his explanation is rejected, the Tribunal has to record a finding on such materials as may be available, whether the money represents revenue receipt taxable as income of the relevant account period. The burden, in the first instance, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch came up fat decision before it. The Tribunal said that the simple point for determination as regards the cash credits before them was whether the appellant had been able to prove that the cash deposits represented his accumulated income from the year 1930 to 1944 from his agricultural farm and from his business of seeds etc., and was as alleged by him brought in the year of account as capital investment for increasing the volume of business as and when necessity arose. This was not the real question that arose in the appeal. It was /or the taxing authorities to first discover the material;; on the basis of which it could be held that the receipts were revenue income taxable in the relevant year. The assessee no doubt had the burden of giving an explanation, but as held above the mere fact that the explanation was not found to be correct does not necessarily in every case lead to the inference that it was revenue income liable to be taxed. In some case, the fact that the explanation given was either unreasonable or false could be treated as a circumstance which might alone justify an inference that the income was revenue income taxable as income of that very yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal went on to hold that'the manner in which the appellant kept the accounts of his business left much room for leakage of profits and it could be safely presumed that the accounts of the appellant did not reflect his full income and profits from these sources. This view expressed by the Appellate Tribunal would indicate that, according to it, this concealed income of ₹ 68,958/- was derived from the business in supply of seeds and the contract for packing which the assessee had been carrying on during the previous year in question and the income was concealed by improper maintenance of accounts. Our opinion has to be given on the basis that this sum of ₹ 68,958/- has been taxed as concealed income derived from those very businesses in respect of which accounts were submitted. Examining this aspect, we have discovered that the findings of fact given by the Income-tax Authorities go to show that some instances of concealment of the profits were proved. A sum of ₹ 26,397/- had to be added back for sales of seeds and a sum of ₹ 403/- for sales of plants. In addition the assessee had shown a loss of ₹ 12,782/- in vegeta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In these circumstances a reasonable inference can be drawn that even the other part of this sum of ₹ 68,958/- in respect of which the actual source could not be discovered by the income-tax authorities was concealed revenue income of the previous year in question. It appears that in these circumstances, though the whole amount of ₹ 68,958/-has to be held to be concealed income of the previous year in question, the amounts, which have already been added back as concealed income or extra profits or in respect of losses wrongly shown, cannot be taxed as concealed income of the previous year in question because they have already been taxed and added back and double taxation of the same income is not permissible. What can be taxed on the basis of the deposits made by the proprietor are only those items which have not been added back already when calculating the taxable income and those are the only sums which can be taxed as concealed income of the previous year when making the assessment for the assessment year 1945-46. 5. Our answer, therefore, is that the sum of ₹ 68,958/- represents concealed income of the assessee of the previous year for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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