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TMI Blog1966 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... n a rupee in the firm, Ganesh Prasad Tribeni Prasad. The previous year of the said firm relevant to the assessment year 1947-48 was the one which commenced on the 14th of April, 1946. On the first day of the accounting year of the firm, i. e., on the 14th April, 1946, the capital account of the assessee in the books of the firm was credited with the sum of Rs. 18,005. The assessee was called upon to explain the source, nature and the character of the cash credit. The assessee's explanation was that this was out of the money and ornaments brought from Rangoon in 1943. The assessee had left Rangoon because of enemy action. The assessee and the other partner, Tribeni Prasad, who was also in Rangoon at that time, were forced to leave for India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had not been proved by the assessee. On the bassis of that finding, the question that has to be considered is whether it was open to the income-tax authorities and the Tribunal to raise the inference that the credit represented the income of the assessee for the relevant assessment year ? The contention of Mr. Tiwari, learned counsel for the assessee is that the cash credit having been entered in the books of account on the 14th of April, 1946, i. e. within fourteen days of the commencement of the previous year, which is the financial year for income from any undisclosed source, no inference could properly have beem drawn that the large sum of Rs. 18,005 was the income of the relevant assessment year. For this proposition he relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd nature of the cash credit found entered in the books during the accounting year, the Income-tax Officer is entitled to draw an inference that receipts are of assessable nature. That was a case of a cash credit found entered in the books of accounts of the firm, which is precisely the position obtaining in the present case. Their Lordships observed : "Whether a receipt is to be treated as income or not, must depend very largely on the facts and circumstances of each case. In the present case the receipts are shown in the account books of a firm of which the appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations ..... When both these explanations were rejected, as they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to specify or prove what that source is, which from the nature of the case must be known only to the assessee . . . . The very term 'undisclosed source' shows that the disclosure which the assessee ought to have made has not been made .... The department was not bound to show categorically what that source was . . . . cash credits do not show that the income which is in the hands of the assessee is from the self-same source. It may be from another source." This court was inclined to take the view that "when the source is not known at all, it is difficult to predicate that it is other than the normal business. An entry of a cash credit or deposit may not show that the income is from the business but it also does not show that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : see A. Govindarajulu Mudaliar v. Commissioner of Income-tax." It was further held that the amount of cash credits could be added as income from an undisclosed source even though they were found credited in the business books of the assessee. In view of the pronouncement of the Supreme Court in Kale Khan's case the assessee can no longer derive any advantage from Devi Prasad's case. It was then contended that the view taken by the Supreme Court in the cases of Govindarajulu Mudaliar and Kale Khan would appear to have been modified by the Supreme Court in Parimisetti Seetharamamma v. Commissioner of Income-tax. That is not so. The Supreme Court merely explained that Govindarajulu Mudaliar's case, which had laid down that the burden of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The legal inference therefore could have legitimately been drawn by the Tribunal, from the assessee's failure to satisfactorily prove the source, nature and character of the sum of Rs. 18,005, that it was income from an undisclosed source and as such assessable in the relevant assessment year 1947-48. On the facts and in the circumstances of the case, it is not possible to say that such an inference could not have been drawn by any person duly instructed in the law. It was a possible inference and the Tribunal not having misdirected itself, it cannot be said that the Tribunal acted illegally in treating the sum as liable to tax for the assessment year 1947-48. For the reasons given above, the question is answered in the affirmative and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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