TMI Blog1954 (10) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 each on the 19th of January, 1946, which falls within the accounting period. The Income-tax Officer estimated the income from house property at Rs. 1,200 and from other sources at Rs. 1,000. The business income estimated by him amounted to Rs. 2,06,082. This sum included the amount of Rs. 73,000 representing the value of the high denomination notes encashed by the assessee. We are concerned only with this amount of Rs. 73,000 in this case. In the form of declaration that had to be made under section 6 of the aforesaid Ordinance against column No. 16 as to when and from what source the declarant came in possession of bank notes now tendered the assessee noted not rememberable because of above being kept with female inmates of the family and against column No. 15 as to the reasons for keeping above amount in high denomination notes rather than in current account, fixed deposit or securities, he noted kept with the female inmates of the family privately. In the verification of that declaration, however, the assessee declared that the bank notes tendered belonged to him and were not benami holdings. On being required by the Income-tax Officer to explain the nature and sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare in the profit and he estimated his share of profit at Rs. 7,500. He, therefore, excluded the balance of Rs. 65,500 from the assessment. The Income-tax Officer went in appeal to the Tribunal who gave an opportunity to the assessee to produce Mr. N.K. Misra for examination. Mr. Dutt who appeared for the assessee before the Tribunal, however, frankly admitted that Mr. N.K. Misra was not likely to support the assessee's version and, therefore, he could not examine him. The Tribunal accepted the department's contention and held that the aforesaid notes were not encashed on behalf of Mr. N.K. Misra. The Tribunal, however, held that it was not unlikely that the assessee who was a zamindar and moneylender could have some notes of high denomination with him as part of his savings and estimated such savings at Rs. 20,000. The Tribunal, therefore, excluded this sum of Rs. 20,000 from the assessment and confirmed the inclusion of the balance of Rs. 53,000 in the assessee's total income from secreted sources. An application before the Appellate Tribunal by the assessee to refer to the High Court certain questions of law having failed, the assessee filed an application in this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in law also on the ground that there being no material on the record the fixation of only a sum of Rs. 20,000 as representing the savings of the assessee is arbitrary. In my opinion, both the points raised by the counsel are unsound. It is by now an established principle of law that the onus is on the assessee to prove positively the source and nature of an amount received by him in the accounting year, and if he fails to discharge that onus, the Income-tax authorities are entitled to draw an inference that the amount received was of an income nature. In S.N. Ganguly v. Commissioner of Income-tax, Bihar and Orissa [1953] 24 I.T.R. 16, a Bench of this Court held as follows: When the assessee fails to prove positively the source and nature of a certain amount which he received in the accounting year, the revenue authorities are entitled to draw an inference that the receipts are of an income nature, unless the assessee proves the source and nature of the particular receipt. The burden of proof in such a case is not upon the revenue authorities, but the burden of proof is upon the assessee to show that the item of receipt was not of an income nature. In support of thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When he was required by the Income-tax Officer to give his explanation as to how he could be in possession of those notes, he changed his version and definitely stated that they did not belong to him and put forward a different case that out of the above sum of Rs. 73,000, a sum of Rs. 55,000 belonged to his daughter-in-law as having been given to her by her grandfather at the time of her marriage and the balance of Rs. 18,000 belonged to his wife as being her personal savings. When any gift of this amount to his daughter-in-law was denied by Brij Gopal, the father of his daughter-in-law, the assessee came out with a new case that the entire sum of Rs. 73,000 belonged to one Mr. N.K. Misra who encashed the notes in his name. No material was placed before the Income-tax Officer to support the explanation. Mr. N K. Misra was not examined, and, as already observed, Mr. Dutt appearing for the assessee conceded before the Appellate Tribunal that N.K. Misra might not support the assessee's version. Thus, the authorities were left only with the contradictory versions of the assessee on the point of the explanation as to how he could be in possession of those high denomination notes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of at least over Rs. 63,000 as emergency reserve and his habit was to keep the reserve as far as possible intact and to take out money from the current account of various banks for meeting the day to day expenditure of the colliery business. The contention that their Lordships accepted in that case depended on the particular facts of that case. Moreover, in the present case, the Appellate Tribunal has given reasons for coming to the finding as to why only a sum of Rs. 20,000 out of the aforesaid amount of Rs. 73,000 should be excluded from being taxed. The following passage occurring in paragraph 5 of the order of the Appellate Tribunal is of importance in this case: He (the assessee) has not produced any evidence apart from that of himself to prove that the monies belonged to the ladies. We have nevertheless to consider the assessee's status in life and the habits of a person so placed. It is in the nature of things for people like the assessee to keep some high denomination notes. The question is how much and what would be an estimate of such notes of high denomination that the assessee could have held. Admittedly, there is no evidence as to these and we have to make ..... X X X X Extracts X X X X X X X X Extracts X X X X
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