9911796707
TMI Blog1959 (1) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1940-41? The reference relates to the assessment year 1942-43, the accounting year being 1941-42. The assessee is a firm having tanneries at Ellore and at other places. It had several purchasing centers of raw hides. In addition, purchases were made on a large scale at Calcutta through one Velak Syed Mohammad Ali, a brother of some of the partners, up to December, 1941, and thereafter through one M.K.M.D. Makdoon, a former employee of Velak Syed Mohammad Ali aforesaid. The partnership consisted originally of six persons. Subsequent to 1st April, 1940, eight other person joined the partnership, with the result that at the relevant time there were fourteen partners. This partnership had a personal account for the Calcutta a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 31,000. Having regard to the nature of this explanation and other factors set out in his order, the Income-tax Officer felt that it was unconvincing and rejected it. In the result, he added ₹ 1,15,000 for the accounting year 1940-41 and ₹ 1,26,000 for the charging period, i.e., for 1942-43, as the concealed income. On appeal, the Appellate Assistant Commissioner, on a review of all the circumstances, concurred in the opinion of the Income-tax Officer, with the result that assessments made by the Income-tax Officer were confirmed. The assessee carried further appeals to the Income-tax Appellate Tribunal which dismissed both of them. The matter was discussed at some length in the appeal relating to the assessment year, 1940 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint for both the proceedings from all the partners. The further explanation of the second set of items was the same as to the individual sources, initial payment of the contribution into the hands of the partner, Syed Mohammad, and the manner of transmission of the case through messengers, as that bearing on the year 1940-41. The assessee, when called upon by the Income-tax Officer to produce evidence in regard to the assessment proceedings for the year 1942-43, stated categorically that he had no evidence other than what the company produced in the re-assessment proceedings for 1940-41. It also transpires that before the Appellate Assistant Commissioner the counsel claimed that the facts and circumstances of the year 1942-43 were identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Income-tax [1954] 26 I.T.R. 344. It was ruled by Ramaswami and Ahmad, JJ., of the Patna High Court that while with regard to cash credits in the assessee's name in his books the burden of proof was on him to show positively the sources and nature of the amount shown in the items and in the absence of a satisfactory explanation it was open to the Revenue to draw the inference that the receipt was of an income nature, the position was different in regard to sums standing in the names of third parties. In the opinion of the learned judges, in such a case, the onus was upon the Department to show by some material that the amounts standing in the names of third parties did not belong to them, but to the assessee. With great ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We think that our opinion is also reinforced by the observations in the judgment of the Supreme Court in Govindarajulu Mudaliar v. Commissioner of Income-tax [1958] 34 I.T.R. 807 which is to the following effect: There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. This indicates that the learned judges did not make any distinction between the entries in the names of partners and those in the names of third parties. Therefore, our conclusion is that the credits in the names of third parties are not disti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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