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TMI Blog1956 (2) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of some observations by Rao and Tambe, JJ., in Munnalal Biharilal v. Commissioner of Income-tax(1) (Miscellaneous Civil Case No. 218 of 1953, decided on 23rd September 1955). With the utmost respect, we would state that there was no occasion for any such comment as there was no decision in that case. The case is now being decided by this order. 3. The assessee was R.S.P.S. Sial, since deceased who is now represented by his widow, and his sons and daughters. In the account year 1947-48 there was a credit amount of ₹ 14,600 on 31st March, 1948, to his personal account in the books of his head office. This amount was held to be his business income by the Income-tax Officer. He wrote in brackets the words 'No explanation offered' and below that remark he observed: There are several sources from which the cash credits could have come but the actual source from which those particular items did in fact come, was only in the assessee's special knowledge. He refuses to disclose it as is evident from the explanation and statements furnished. The natural inference is that the indication of the true source would make it liable to tax and on this ground it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld accept the assessee's explanation in regard to the sums of ₹ 100 and ₹ 200. As for the balance, we are unable to accept the assessee's explanation. The point has been considered by the Appellate Assistant Commissioner. In our opinion, he is right. It will thus be observed that the Tribunal has merely endorsed the reasons on which the Appellate Assistant Commissioner reached his decision. 6. There can be no doubt that the remark of the Income-tax Officer 'No explanation offered' is evidently incorrect. He has himself referred to the assessee's explanation and statements in his order. The explanation has also been referred to and considered by the Appellate Assistant Commissioner. The explanation, however, has not been filed along with the statement of case and forms part of the connected Miscellaneous Civil Case No. 190 of 1951. We have, therefore, noticed that explanation which has not been disputed by the learned counsel for the Department. 7. The assessee's explanation is as under: The assessee was a partner with his son Shri I.S. Sial for doing business of Chhindwara Military Works. He had huge funds of this partnership. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st March, 1948, the last date of the account year. (3) The explanation that the sum was such as to make up the capital of the newly formed company of R.S.P.S. Sial and Sons Ltd., was retracted by the assessee's counsel who later took the position that the amount was credited for payment of a draft for ₹ 14,317-14-0 regarding import of saltpetre for the gun powder factory. Differing explanations were merely an effort to explain away the amounts some- how. So far as the Tribunal is concerned, it accepted the assessee's explanation for ₹ 100 and ₹ 200 but not for ₹ 14,600 although the explanation was the same for all the items. The reason for treating these items differently is not explicit in the order. To urge, as was done before us, that the Tribunal acted on the basis that the large sums stated by the assessee were likely to be invested during the long course of time and could not, therefore, be available except for small amounts is only to embark on a conjecture. This contention also ignored the sums amounting to ₹ 14,200 which, as the explanation shows, were received in close time relationship with the date of the credits entry in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that he had received money from the sources alleged by him and whether the credit amount was available from that fund. This matter was independent of the question as to why and for what purpose he invested the money on the last day of the account year. An assessee is not bound to give any reason for his dealings, unless it is relevant for purposes of the enquiry. These points also did not, therefore, justify rejection of the explanation of the assessee. 12. The question that arises in this case is whether the Revenue Authorities are entitled to reject an assessee's explanation, which prima facie discloses a genuine source of the receipt, on grounds which are not relevant to the enquiry. This question did not arise in Hargovindas Karsandas Thakkar v. Commissioner of Income-tax, Madhya Pradesh Bhopal, Nagpur Misc. Civil Case No. 256 of 1951, and Sarafali v. Commissioner of Income-tax (Miscellaneous Civil Case No. 114 of 1951, decided on 13th April, 1953) nor indeed in Munnalal Biharilal v. Commissioner of Income-tax (Misc. Civil Case No. 218 of 1953) in which these cases were approved and followed. This question arose in N.J. Naidu v. Commissioner of Income-tax [1956] 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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