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Issues Involved:
1. Burden of proof on the Income-tax Officer to prove by positive evidence that the credit entry is assessable income. 2. Material to hold that the Rs. 50,000 credits constitute assessable income. 3. Material for the finding that the assessee deliberately furnished inaccurate particulars of income. Detailed Analysis: Issue 1: Burden of Proof on the Income-tax Officer The first issue concerns whether the Income-tax Officer (ITO) or appellate authority must prove by positive evidence that the Rs. 50,000 credit entry is assessable income when the assessee's explanation is false or unbelievable. The court held that there is no requirement in law for the ITO to prove by positive evidence that the sum is assessable to tax. The court emphasized that the ITO can base his conclusions on circumstantial evidence. The judgment referenced the case of The Commissioner of Income-tax v. Kameshwar Singh, which supported the notion that the ITO can make an assessment based on material available to him, even if it is not strictly evidence admissible in a court of law. The court concluded that the ITO has a certain latitude in arriving at the proper figure of assessment and that the burden of proof does not solely lie on the ITO to establish the income by positive evidence. Issue 2: Material to Hold that Rs. 50,000 Credits Constitute Assessable Income The second issue deals with whether there was any material to hold that the Rs. 50,000 credits in the personal accounts of the proprietors constitute assessable income. The court found that there was considerable material on which the Income-tax authorities could conclude that the Rs. 50,000 was indeed income from undisclosed sources. The court noted that the assessees failed to provide satisfactory evidence to support their claim that the amount was capital obtained from the sale of gold ornaments. The ITO's investigation revealed discrepancies in the vouchers provided by the assessees and denials from the purported buyers of the gold ornaments. The court referenced the case of Gunda Subbayya v. Commissioner of Income-tax, Madras, which supported the notion that the ITO can act on material gathered during his investigation and is not confined to evidence in a court of law. The court concluded that the ITO acted fairly and reasonably, giving the assessees ample opportunity to prove their claim, which they failed to do. Issue 3: Material for Finding Deliberate Furnishing of Inaccurate Particulars The third issue pertains to whether there was any material for the finding that the assessee deliberately furnished inaccurate particulars of income amounting to Rs. 50,000. The court held that the Income-tax authorities have the discretion to decide whether the particulars furnished by the assessee are deliberately inaccurate. The court noted that the authorities had acted within their discretion and had sufficient material to conclude that the assessee had deliberately furnished inaccurate particulars. The court referenced Section 28 of the Income-tax Act, which allows for the imposition of a penalty if the assessee has concealed income or furnished inaccurate particulars. The court found that the authorities had acted fairly and given the assessees every opportunity to explain the discrepancies, which they failed to do satisfactorily. Conclusion: The court answered the first question in the negative, indicating that the burden of proof does not lie solely on the Income-tax Officer to prove by positive evidence that the sum is assessable to tax. The second question was answered in the affirmative, confirming that there was material to hold that the Rs. 50,000 credits constitute assessable income. The third question was also answered in the affirmative, supporting the finding that the assessee had deliberately furnished inaccurate particulars of income. The assessees were ordered to pay the costs of the references.
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