9911796707
TMI Blog1977 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 12,094 from the account of the assessee with the Lahore branch of the Punjab National Bank Ltd. to the New Delhi branch of that bank in June, 1947. He also transferred from the Lahore branch of the Punjab National Bank Ltd. to the branch of that bank at New Delhi two sums of Rs. 13,000 and Rs. 6,000, the former in his own name and the latter in the name of his wife and obtained fixed deposit receipts for these two amounts from the New Delhi branch of the bank in July, 1947. He left Lahore in June, 1947, and proceeded to Mussoorie but on his way he stopped at Amritsar for a few days. He opened an account with the Amritsar branch of the Imperial Bank of India by depositing a sum of Rs. 300 with a view to obtaining a locker in the safe deposit vault where he could deposit for safe custody a trunk which he had brought with him from Lahore containing gold ornaments, jewellery and cash. It seems that a locker was not available and hence he deposited the trunk in a sealed condition with the Amritsar branch of the Imperial Bank of India on 25th June, 1947. The sealed trunk, according to the assessee, contained gold ornaments of the value of Rs. 1,19,320, gold rawa of the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Delhi and when the business of the assessee was commenced, he surrendered the locker and brought the entire gold, jewellery and cash into the business. It was emphasised by the assessee as a supportive fact that after Roshan Lal migrated from Lahore in June, 1947, until the assessee started the business of Roshan-di-Hatti on 30th March, 1948, neither the assessee nor Roshan Lal had any other business or means of income from which the assets of Rs. 3,33,414 could have been earned. This explanation was given in the course of various statements made by the assessee from time to time before the Income-tax Officer. The assessee also examined Hira Lal, father-in-law of Roshan Lal, and filed affidavits of Mulk Ram, Billa Mal, Dalal, Wazir Chand, Devidas Mehra and Panna Lal before the Income-tax Officer for the purpose of showing that the assessee was having a large gold and jewellery business in Lahore before migration and that it did not carry on any business in India before starting the business of Roshan-di-Hatti on 30th March, 1948. The Income-tax Officer also examined Prem Nath and Kishan Chand, brothers of Roshan Lal. The statement of Prem Nath was to the effect that their father ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto Road, New Delhi, and fixed deposit receipts were taken for this total sum of Rs. 19,000 from the Delhi bank in July, 1947. All these monies including the realised fixed deposits later on went into the assessee's account with the State Bank of India which reveals a credit balance of Rs. 35,053 as on March 30, 1948. This atleast shows that the assessee was not a man of very small means while he was at Lahore. He was having four accounts in different banks at Lahore. The particulars, however, are not available and it is also stated that most of these accounts were very small ; but even then a man of very modest means would not normally have so many bank accounts. Moreover, while at Lahore Shri Roshan Lal had taken life insurance policies for Rs. 22,000. A number of letters and receipts regarding business transactions in Lahore were also filed which indicate that the Lahore business was not as small as the Income-tax Officer has taken it to be. There are some papers which relate to deals worth Rs. 10,000 or more at one time. There are also several vouchers relating to advertisement charges paid at Lahore. All these things together with the fact that the assessee was in a position t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital safely into India ; but the circumstances of the case do, in my view, justify a much larger allowance for old capital than has been allowed by the Income-tax Officer. In my opinion, a reduction of the assessment by Rs. 80,000 will meet the requirement of the case." The Appellate Assistant Commissioner thus reduced the figure of undisclosed income of the assessee to Rs. 2,33,414. But this relief was not enough and the assessee preferred a further appeal to the Tribunal. When the appeal came to be heard by the Tribunal, Roshan Lal, who was present at the hearing, was asked by the members of the Tribunal as to how he had brought gold and jewellery from Lahore and he stated that it was brought in train in a box of the size of 2 1/2" X 1 1/2" X 1' and he was then asked what was the weight of the box, to which he replied stating that the weight of the contents of the box was about eight seers. The Tribunal then, after hearing the arguments of the parties, rejected the appeal. The main arguments which weighed with the Tribunal in negativing the appeal of the assessee were : first, if the weight of the contents of the box was only eight seers, the value of gold and jewellery in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court answered the question referred to it in favour of the revenue by holding that there was material on the basis of which the Tribunal could come to the conclusion that Rs. 2,33,414 represented the undisclosed income of the assessee. Hence, the present appeal by the assessee with special leave obtained from this court. Now, the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him. If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the revenue is entitled to treat it as taxable income. This was laid down as far back as 1958 when this court pointed out in A. Govindarajulu Mudaliar v. Commissioner of Income-tax [1958] 34 ITR 807, 810 (SC) that : 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. To put it differently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and papers which referred to dealings involving Rs. 10,000 or more at a time and there were also several vouchers produced by the assessee relating to advertising charges paid at Lahore. The business carried on by the assessee at Lahore was, therefore, a reasonably large business though its extent could not be verified by any reliable material produced by the assessee. The assessee undoubtedly filed affidavits of Mulk Ram, Billa Mal, Dalal, Wazir Chand, Devidas Mehra and Panna Lal, but, as commented upon by the Tribunal, these affidavits were vague and could not be regarded as having much evidentiary value. Still they did go to show that the Lahore business of the assessee was a fairly large business. The Tribunal was no doubt right in commenting that primary evidence with regard to the extent of the Lahore business of the assessee was not forthcoming, but it must be remembered that the assessee was being called upon to prove the extent of its business in a territory from which the members of the Hindu undivided family had to flee for their lives and from where it was totally impossible to produce any primary evidence. Be that as it may, it was found as a fact by the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, therefore, be that the assessee did not earn any assessable income before migration from Lahore. Now, it is true that where an assessee has not paid income-tax, the presumption ordinarily must be that the assessee had no assessable income, but here the fact remains that the assessee transferred no less than an aggregate sum of Rs. 31,094 from Lahore to New Delhi and also brought de substantial amount either in the form of jewellery, etc., or cash " and deposited the same in a sealed trunk with the Imperial Bank of India, Amritsar branch, in June, 1947. This obviously the assessee could not have done unless it had a reasonably large business in Lahore and, therefore, the fact that the assessee did not pay income-tax in Lahore cannot have much evidentiary value. All that it would show is that, as pointed out by the Tribunal, " the assessee has not been very straightforward in his dealings with the income-tax department ". The Tribunal also relied upon certain answers given by Roshan Lal when he was questioned by the Members of the Tribunal at the hearing of the appeal. It must be pointed out straightaway that these answers given by Roshan Lal could not be relied upon by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of which the Tribunal could come to the conclusion that though the assessee had a fairly large business in Lahore and had brought its entire ornaments, jewellery and cash from Lahore and deposited the same in a sealed trunk with the Amritsar branch of the Imperial Bank of India, these ornaments, jewellery and cash, were worth not more than Rs. 1,00,000. One may also ask the question that if the assessee did not bring assets worth more than Rs. 1,00,000 from Lahore, where and how did it get the remaining assets of the value of Rs. 2,33,414 ? Roshan Lal had come away from Lahore as a refugee and conditions in post-partition India were also highly unsettled and the clear and undoubted evidence was that neither Roshan Lal nor the assessee had any business or other means of income in India until 30th March, 1948. In this situation, it is impossible to believe that the assessee could have earned such a huge amount of profit of Rs. 2,33,414 within a few months, even if it be assumed that some business was started by it in October, 1947, when Roshan Lal came down to Delhi. The utter improbability, amounting almost to impossibility, of the assessee having earned such a large amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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