TMI Blog1986 (4) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... 54(2) of the Act, which is annexure A to the supplementary statement of the case. In the supplementary statement of the case, the amount was wrongly mentioned as Rs. 2,77,472 and question No. 1 which was not called for by this court under section 256(2) was also referred. Question No. 1 is to the following effect in the supplementary statement of the case : Whether, on the facts and in the circumstances of the case, the Tribunal has committed errors of record which has vitally vitiated the findings of fact ? " This question was never called for by this court, as it will appear from page 44 of the paper book where questions were specifically mentioned. Hence, the aforesaid question No. 1 which was not called for by this court has to be ignored and in questions Nos. 2 and 3, which are relevant questions before us, the amount has been wrongly mentioned in the supplementary statement of the case. The relevant facts of the case may be culled from the statement of the case read with annexure A of the supplementary statement of the case which has incorporated the entire order of the Tribunal as amended under section 254(2) of the Act. The assessee-petitioner is a Hindu undivid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal expenses on the ground that the acceptance of the sum of Rs. 10 lakhs would not leave adequate money for such expenses. To verify the correctness of the statement, a reference was made to the appropriate authority with the result that it has now been found after receipt of the report that neither the original nor the revised disclosure statements of the assessee included this deposit of Rs. 2,77,471. The Income-tax Officer, therefore, held that the assessee's contention that the sum of Rs. 10 lakhs shown under the head " Miscellaneous " in the original disclosure included this sum of Rs. 2,77,471 and hence the Commission held that since the balance left after taking into account all their deposits and investments would not be adequate to meet the personal expenses and an identical sum of Rs. 2,77,000 was added towards it, is rather fanciful and does not appear to have been based on facts. The Income-tax Officer found that the reasons for estimating the personal expenses at Rs. 2,77,000 were altogether different and have been clearly mentioned in paragraph 34 of the authorised official's second report, an extract of which the Income-tax Officer has given. The Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erstood as to how a conclusion follows from the alleged silence of the directors. Moreover, the directors have written to the Commissioner of Income-tax, Bihar, stating that the deposit under consideration in that appeal had not been considered in the settlement arrived at. The Appellate Assistant Commissioner, therefore, rejected this contention. Before the Appellate Assistant Commissioner, it was also argued that this deposit is covered by the receipts of cash or other funds amounting to Rs. 8,86,738 by the Darshan Ram Group between June 20, 1947, and March 24, 1948, as per details given in the written explanation of the assessee before the Income-tax Officer which is annexure 1, at page 4 of the paper book. The Income-tax Officer dealt with this aspect of the matter fully in his remand report and the Appellate Assistant Commissioner held that there is nothing to show any co-relation between the deposit on January 19, 1951, and the drawing which ended on March 24, 1948. The Appellate Assistant Commissioner took the view that a person who can spend more than Rs. 6,00,000 between 1948 and 1951 could also have easily spent away the balance of less then Rs. 3 lakhs. The Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finding was that the expenditure was obviously met out of the secret profits. The Tribunal took the view that in view of this finding, the plea of the assessee that out of the withdrawals of Rs. 8,86,738, the sum of Rs. 3,53,520 went towards the personal expenses for the assessment years 1944-45 to 1946-47 does not stand to reason. It was conceded before the Tribunal that in the assessment years 1944-45 to 1946-47, the authorised representative estimated the expenditure at Rs. 6 lakhs and the finding is that it has been met from the secreted profits and that for the expenditure incurred for the assessment years 1947-48 to 1950-51, there was sufficient withdrawal to cover the expenditure. It was argued before the Tribunal that the amount of Rs. 8,86,738 withdrawn was available intact out of which the deposit of Rs. 2,77,471 was made in the Bharat Bank Ltd. on January 19, 1951. The Tribunal asked the advocate for the assessee to explain that if the sum of Rs. 8,86,738 remained intact out of which the deposit of Rs. 2,77,471 was made in the Bharat Bank, Ltd., then what happened to the balance amount, but the advocate for the assessee was unable to give any answer. Hence, the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Bandhan Ram is the karta and so the deposit has been made in his name and so the deposit has to be considered in the assessment of the Hindu undivided family of Bandhan Ram and Sons. The Tribunal, therefore, dismissed the appeal. As regards the addition of Rs. 2,77,471, the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal have all held that this amount was not available either out of the amount of Rs. 10 lakhs or out of the withdrawals of Rs. 8,86,738 between June 20, 1947, and March 24, 1948, and this is a finding of fact recorded by all the three lower authorities and so this court cannot come to a different finding on the same materials on record. All the three authorities have discussed fully and examined the report and, on that basis, they have clearly come to a finding that the amount of Rs. 2,77,471 could not be available either out of the amount of Rs. 10 lakhs or out of the amount of Rs. 8,86,738. The reasons given by the three lower authorities are cogent and they have to be accepted. Mr. K. N. Jain, for the assessee, has relied on the order of the Tribunal under section 254 of the Act which is annexure 2 and is available at pages 16 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that any amount was available to the assessee as intangible addition. It has next been argued that the findings of the Tribunal are vitiated and so it should not be accepted. For this purpose, Mr. K. N. Jain has relied on the case of Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC), where it has been held that the conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which require to be explained by the assessee the assessee should be given an opportunity of doing so and on no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises; nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its finding even though on questions of fact will be liable to be set aside by this court. Similar view has been taken in the case of CIT v. S. P. Jain [1973] 87 ITR 370 which is also a decision of their Lordships of the Supreme Court. In the present case before us, I hold that the finding of the Tribunal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act could not go behind the Tribunal's findings of fact and that the High Court could only lay down the law applicable to the facts found by the Tribunal. Their Lordships of the Supreme Court also held that the High Court and the Supreme Court, in an appeal against the judgment of the High Court given in a reference under section 66 of the Act, were not constituted courts of appeal against the order of the Tribunal. Under such circumstances, the finding of the Tribunal that the amount of Rs. 2,77,471 which was deposited in the name of Bandhan Ram, karta of the Hindu undivided family, on January 19, 1951, in the Bharat Bank Limited, Calcutta, was not available out of the amount of Rs. 10 lakhs or out of the amount of Rs. 8,86,738 and that the amount was the undisclosed income of the assessee has to be accepted as a finding of fact and this court cannot give a different finding. Hence, as regards question No. 1, it has to be held that the deposit of Rs. 2,77,471 in the Bharat Bank Ltd. on January 19, 1951, is unexplained income of the assessee. Question No. 2 is to the effect whether this deposit of Rs. 2,77,471 in the name of Bandhan Ram Badhani is taxable in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that Bandhan Ram had any individual business and had enough earnings. The assessment order shows that the assessee-Hindu undivided family had business income of Rs. 50,380. Thus, the Hindu undivided family had a source of income and the amount could be deposited out of the undisclosed business income of the assessee-Hindu undivided family. Mr; K. N. Jain has relied on various decisions for the purpose that under the Hindu law, there is no presumption that a business standing in the name of the manager is a joint family business even if the manager is the father. In this connection, Mr. K. N. Jain, for the assessee, has relied on the case of Chattanatha Karayalar v. Ramachandra Iyer [1956] SCJ I ; AIR 1955 SC 799, which is a decision of their Lordships of the Supreme Court. In this case, it has been held that under the Hindu law, there is no presumption that a business standing in the name of any member is joint family one even when that member is the manager of the family, and it makes no difference in this respect that the manager is the father of the coparceners. Similar view has been taken by their Lordships of the Supreme Court in the case, of G. Narayana Raju v. Chama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see-Hindu undivided family had sources of income. Moreover, the decisions relating to the business will not be applicable in the present case as the question is as to from what source the amount of Rs. 2,77,471 was deposited in the Bharat Bank Ltd., on January 19, 1951. Of course, Mr. K. N. Jain has relied on the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349, where their Lordships of the Supreme Court, having found on the particular facts of the case, held that the approach of the Tribunal that the firm could not have obtained an overdraft against the security of B's fixed deposit was erroneous and that the circumstances of the transfer of amount of Rs. 5 lakhs from Calcutta to Jamnagar for fixed deposit in the name of B and the use soon thereafter of the said fixed deposit receipt as security for the overdraft facility to the respondent-firm did not justify the inference that the amount belonged to the respondent firm. Their Lordships of the Supreme Court also held that it is common feature of commercial and other transactions that securities are offered by other persons to guarantee the payment of the amount which may be found due from the principal debtor and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hdrawals by the bigger Hindu undivided family. Thus, Bandhan Ram admitted that the deposits were out of the Hindu undivided family fund. If the case of Bandhan Ram that the amount was deposited out of the fund available from the bigger Hindu undivided family is believed, then, in view of the explanation, it has to be held that the amount was deposited from the fund of the smaller Hindu undivided family of Bandhan Ram and Sons. Bandhan Ram in his written explanation dated May 21, 1956, at pages 4 to 6 of the paper book never asserted that he had deposited the amount from his individual income. This goes to show that the deposit of Rs. 2,77,471 was not from his individual income. Under such circumstances, it has to be held that the deposit was made out of the income of the assessee-Hindu undivided family. In view of my discussions above, I hold that the deposit of Rs. 2,77,471 in the Bharat Bank Ltd. on January 19, 1951, is an unexplained income and that the deposit in the name of Bandhan Ram Bhadani is taxable in the hands of the Hindu undivided family-assessee, Bandhan Ram and Sons. In the result, both the questions are answered in favour of the Revenue and against the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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