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TMI Blog1965 (4) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1951-52, the Income-tax Officer was inclined to treat the money and jewellery given to the appellant as remuneration for services rendered to Sita Devi as a maid-servant. He accordingly issued a notice under section 34 of the Income-tax Act and called upon the appellant to submit an explanation adducing all documentary and other evidence in her possession relating to the receipt of assets admitted by her in her statement " dated August 26, 1949, and relating to other cash amounts and cheques received by her between August 25, 1948, and October 23, 1952, and to other assets possessed by the appellant and disclosed by her in her " wealth statement ". By her statements dated November 27, 1953, the appellant submitted a detailed explanation about the items referred to in the letter of the Income-tax Officer and claimed that income received by her was earned with the aid of property which Sita Devi and the Yuvarani of Pithapuram had given to her out of love and affection from time to time. On December 26, 1954, the appellant was examined on oath before the Income-tax Officer. She stated that : " The credits in my accounts are all out of gifts . . . . . As to correspondence I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the question is due to oversight as no reference was asked for and none was made in respect of that year). The High Court held that there was evidence before the Tribunal to support the finding that the appellant was an employee of Sita Devi and that the cash, cheques and jewellery admitted as received by the appellant were not given to her as gifts made out of love and affection, but as remuneration for services rendered. In the reference relating to the years 1947-48 and 1950-51 the High Court called for a supplementary statement, for determination of the question whether action under section 34 was justifiable. The Tribunal submitted a supplementary statement and thereafter the High Court answered the second branch of the question holding that the action of the Income-tax Officer under section 34 was justified. The appellant has appealed to this court against the order of the High Court recording answers in the two references. It is not necessary to consider whether the Income-tax Officer was competent to issue a notice under section 34 of the Income-tax Act for the years 1947-48 and 1950-51, for, in our view, the property received by the appellant was not remuneration given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act lies upon the assessee. The appellant admitted that she had received jewellery and diverse sums of money from Sita Devi and she claimed that these were gifts made out of love and affection. The case of the appellant was that the receipts did not fall within the taxing provision : it was not her case that being income the receipts were exempt from taxation because of a statutory provision. It was therefore for the department to establish that these receipts were chargeable to tax. The decision of this court in Commissioner of Income-tax v. Calcutta Agency Ltd. lends no support to the proposition which the High Court has enunciated. That was a case in which the taxpayer was claiming under section 10(2)(xv) allowance for an expenditure out of the income of the business and to establish such a claim indisputably the burden lay upon the taxpayer. The following observations made by Kania C.J., in delivering the judgment of the court, make the ratio of the judgment clear: " Now it is clear that this being a claim for exemption of an amount, contended to be an expenditure falling under section 10(2)(xv), the burden of proving the necessary facts in that connection was on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is assessable income where he fails to disclose satisfactorily the source and the nature of the receipt. But in this case the source of the income was disclosed by the appellant, and there was no dispute about the truth of that disclosure. The High Court disposed of the reference holding that the onus of proving that the receipts were not taxable lay upon the appellant, and that he did not discharge that burden. On the view expressed by us the answer recorded by the High Court on the taxability of the receipts must be discharged. Since the High Court has not considered the evidence, we would normally have remanded the case for disposal of the reference according to law. But this proceeding has been pending for a very long time, and that in enforcement of the orders of assessment the entire property of the appellant has been attached. We have therefore thought it fit to hear and decide the reference on the merits. In the view of the Income-tax Appellate Tribunal, in determining the question whether receipts by the appellant represented income liable to be brought to tax under the Income-tax Act, it could not be said that there were no materials justifying the department in treati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vid for disbursing salary to servants of Sita Devi and (ii) in a " bill " issued by the Bombay Garage Ltd. the appellant was described as " private secretary to Princess Sita Devi ". But these circumstances could not establish that what was given to her by Sita Devi was remuneration for services rendered or to be rendered. Realizing this infirmity, the Tribunal observed that the burden of proving that the receipts were not income lay upon the appellant. The Tribunal did not infer that as remuneration for disbursing salary to Sita Devi's servants she was given large amounts of money and jewellery. Description of the appellant in the cash memo issued by the Bombay Garage Ltd. as " private secretary to Princess Sita Devi " could have no evidentiary value. It is not claimed that there was evidence on the record that this was the general repute of the appellant. Description of the appellant as private secretary of Sita Devi in a stray cash memo issued by a third party about the source of whose knowledge there is not an iota of evidence, could not evidence a relationship of master and servant : much less could it prove that what was given by Sita Devi to the appellant was remuneratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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