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TMI Blog1953 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... of the withdrawal of ₹ 30,000 on the 18th of July, 1940. For the assessment year 1946-47 the relevant account year was from the 17th of October, 1944, to the 4th of November, 1945. On the first day, i.e., the 17th of October, 1944, there were three credit entries in the capital account, a sum of ₹ 50,000 in the name of Surajmal Suraj Ram as having been received from him, another sum of ₹ 10,000 as having been received from Srikishan Dass and a third sum of ₹ 5,000 as having been received from Dharam Dass, Surajmal Suraj Ram, Srikishan Dass and Dharam Dass are all members of the Hindu undivided family. The explanation given by the assessee was that Surajmal Suraj Ram had withdrawn a sum of ₹ 50,000 on the 10th of September, 1936, and two sums of ₹ 10,000 and ₹ 5,000 were respectively withdrawn by Srikishan Dass and Dharam Dass on the 18th of July, 1940, and that it is these three items that had been brought back and redeposited on the 17th October, 1944. The explanation given by the assessee as regards these three items was rejected. The Tribunal pointed out that the assessee could not have kept such large sums of money lying idle for suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble income. Shri Jagdish Swarup on behalf of the Department has urged that if it appears from the account books of the assessee or otherwise that, in the relevant account period, the assessee has received a sum of money, the burden lies on the assessee to show that that amount is not taxable income; and, if the explanation given by the assessee is unsatisfactory, the Income-tax Officer can assume that the amount must be taxable income. A large number of cases have been cited at the Bar which Shri Jagadish Swarup has divided into three groups: The first group relates to cases under Section 10A of the Excess Profits Tax Act, the second group relates to cases under Section 34 of the Indian Income-tax Act and the last group relates to the question of assessment under Section 23(3) of the Indian Income-tax Act. According to Shri Pathak, there is no justification in this grouping and he has contended that the same principle should govern all these cases. We are, however, inclined to agree with Shri Jagdish Swarup that the cases have to be grouped in the manner suggested by him. The relevant portion of Section 10A of the Excess Profits Tax Act reads as follows:- 10A. (1) Where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other hand, in Mahabir Prasad Munna Lal v. Commissioner of Income- tax([1947] 15 I.T.R. 393), where the assessee's explanation was rejected, it was held that in each case it would be a question of fact and the answer would depend on the finding whether the inference was a reasonable inference from the assessee's failure to prove his case. The cases in the third group are cases where an Income-tax Officer, in the course of an assessment under Section 23(3) discovers that the assessee has received a sum of money during the relevant account period and his explanation as to the nature of the receipt is not satisfactory. These cases are really in point and we would, therefore, deal with the cases in this group at some length. The first case that was cited to us is Ganga Prasad v. Commissioner of Income-tax, U.P.(1941] 9 I.T.R. 373). In that case there was an entry of the receipt of a sum of money. The assessee claimed that the money had been gifted by his aunt. This explanation was not found satisfactory. The Income- tax Officer further found that he gave an evasive reply to a direct question, whether the money did not represent profits made by himself. It was also found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar have not been proved, the Income-tax Officer cannot draw any other inference except that those two amounts are income receipts. He cannot come to the conclusion that they are capital receipts. If it were held that he should, the result would be that every assessee will be entitled to enter cash credits in his account and refuse to furnish the requisite particulars about its source and nature and insist that those entries should be automatically treated as capital receipts and not as income receipts. In In re Udayram Jagannath [1951] 19 I.T.R. 222 the assessee's explanation that certain cash credits entered in his books represented loans was rejected. The question referred was to the effect whether the Tribunal was justified in holding that the amount represented revenue receipts disguised as cash deposits. The High Court held that the question was one of fact for the Tribunal to decide and on the facts of the case it could not be said that there were no materials on the record on which the Tribunal could come to the finding it had arrived at. The facts in Commissioner of Income-tax and Excess Profits Tax, Madras v. South Indian Pictures Ltd., Karaikudi [1951] 20 I.T.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received in a particular year. The question must always remain a question of fact which has to be decided on the materials available. In each case the revenue authorities are entitled to take into consideration the fact that the explanation given by the assessee is either unreasonable or is false and then to consider whether that circumstance alone or the other materials available along with that circumstance would entitle them to hold that the amount so deposited represented the undisclosed income of the assessee in the year in question. Mr. Pathak, learned counsel for the assessee, has relied on the fact that the amount of ₹ 5,000 was deposited on the 25th of November, 1941, i.e., a month and five days from the beginning of the account year, which was 20th October, 1941. Considering the extent of the business mentioned above it cannot be said that it was not possible for the assessee to have made secret profits of ₹ 5,000 in the course of a month and five days. We cannot, therefore, say that the inference drawn was an unreasonable inference. As regards, however, the cash deposit of ₹ 65,000, learned counsel for the assessee has pointed out that the depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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