TMI Blog1974 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ucks and other vehicles. During the examination of its books of account, the Income-tax Officer found certain cash credits in the names of two persons, namely, Shree Zahir Hussain and Shree Ram Swarup Saw. In the name of Shree Zahir Hussain there were two credit entries, dated the 24th July, 1961, and the 27th October, 1961, for Rs. 5,000 and Rs. 7,000, respectively. The credit entry in the name of Shree Ram Swarup Saw was dated the 27th October, 1961, for a sum of Rs. 8,000. The Income-tax Officer issued summonses under section 131 of the Act to both the persons above-named, in whose favour the credit entries stood. Shree Zahir Hussain appeared before the Income-tax Officer and stated on oath that he invested the amount of Rs. 12,000 during the assessment year 1962-63 from out of his past income. Shree Ram Swarup Saw also appeared in person and stated on oath that he had also invested a sum of Rs. 8,000 out of his income of the past. It was further stated by both the creditors that they were income-tax assessees. The Income-tax Officer disbelieved the statements on oath of the aforesaid two creditors. The statement of Ram Swarup Saw was not accepted for the following reasons: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the depositors could not lead to the conclusion that they were in a position to advance the money to the assessee, and, since the assessee could not prove that the depositors were in a position to make the deposits to the extent they stood in the books, the onus that lay on the assessee had not been discharged. All the same, the Tribunal also found that both the depositors were doing some business and subsequently they had filed returns showing some small income. In that view of the matter, the Tribunal thought it fair and reasonable to allow a sum of Rs. 5,000 as having been sufficiently explained by the assessee; but the remaining sum of Rs. 15,000 was added to the assessee's income as being secreted profits. Mr. N. P. Agrawala, learned counsel for the assessee, contended, and, in my view, rightly so, that the position under section 68 of the 1961 Act is in no way different from that with regard to cash credit entries prior to the 1961 Act; and although there was no specific statutory provision in the 1922 Act, the principles which governed cases arising under the 1922 Act would also govern cases falling under section 68 of the 1961 Act. Learned counsel further contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactorily the nature and source of that entry and to show that it does not constitute a part of his income liable to tax. If the credit entry stands in the names of the assessee's wife and children, or in the name of any other near relation, or an employee of the assessee, the burden lies on the assessee, though the entry is not in his own name, to explain satisfactorily the nature and source of that entry. But, if the entry stands not in the name of any such person having a close relation or connection with the assessee, but in the name of an independent party, the burden will still lie upon him to establish the identity of that party and to satisfy the Income-tax Officer that the entry is real and not fictitious. Once the identity of the third party is established before the Income-tax Officer and other such evidence are prima facie placed before him pointing to the fact that the entry is not fictitious, the initial burden lying on the assessee can be said to have been duly discharged by him. It will not, therefore, be for the assessee to explain further as to how or in what circumstances the third party obtained the money and how or why he came to make advance of the money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one general or universal proposition of law which could be the guiding yardstick in the matter. Each case has got to be decided on the facts and circumstances of that case. The surrounding circumstances to be considered must however be objective facts, evidence adduced before the taxing authorities, presumption of facts based on common human experience in life and reasonable conclusions. In holding a particular receipt as income from undisclosed source, the fate of the assessee cannot be decided by the revenue on the basis of surmises, suspicions or probabilities. Further, the High Court in deciding a reference can and should always intervene in the conclusions of the Tribunal, if it is satisfied that such conclusions were arrived at although there is no evidence or that the conclusions are perverse." Again, at page 416, " It is true that, according to the assessee, the money belonged to the firm, and constituted parts of the firm's undisclosed income as admitted by them before the Investigation Commission and, therefore, their books of account would not reveal any entry showing the said amount; even then it should be remembered that when the cash credits are entered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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