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TMI Blog1968 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... the total income of the assessee as income from undisclosed sources. The amount added was the value of the gold seized on January 30, 1958. But the Appellate Assistant Commissioner deleted that addition in the appeal preferred by the assessee on two grounds. The first was that the gold did not belong to the assessee and the second was that its confiscation resulted in a loss which should be set off against the income from undisclosed sources, if any. But in the appeal preferred by the Income-tax Officer, the Income-tax Appellate Tribunal reversed the finding of the Appellate Assistant Commissioner and substituted a finding that the gold was acquired by the assessee out of its income from undisclosed sources. But it directed the addition of a smaller sum of money amounting to Rs. 48,880 which was the value of the gold calculated at a rate lower than the market rate. The assessee then made an application under section 66(1) to the Tribunal in which he wanted six questions to be referred to this court. The Tribunal dismissed that application. But, on an order made by this court under section 66(2), the Tribunal has now referred to this court two questions of law which read : " (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year relevant to the assessment year 1959-60, although it fell within the accounting year of the assessee, according to the system of accounting maintained by him. So, according to the declaration of the law made by the Supreme Court, that income which was included by the Tribunal in the total income of the assessee relevant to the assessment year 1959-60, could not have been so included since its inclusion was possible only with respect to the assessment year 1958-59. What we have said so far would, if nothing else could be said about it, produce the answer to the second question referred to us, in favour of the assessee. But Mr. Rajasekhara Murthy appearing for the department contended that the second question which is before us did not arise out of the order of the Tribunal, and so could not have been either referred by the Tribunal to us under section 66(1) or directed to be referred by this court under section 66(2). It was maintained that the argument that the income could not have been included in the income relevant to the assessment year 1959-60 was not raised before the Tribunal when, it heard the appeal, and so, was not decided by it, and that therefore the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a question which presents a new aspect of the question of law which was before the Tribunal could be so referred. The assessment year in that case was 1946-47 and the question was whether a sum of money which was the difference between the original cost and the written down value of the assessee's ship which was lost as a result of enemy action could when the assessee received from Government compensation for such loss be properly included in the income of the assessee. Such inclusion was possible only under the fourth proviso to section 10(2)(vii) of the Income-tax Act. But that proviso was not in the Act on April 1, 1946, but came into effect only on May 4, 1946, and was not retrospective. It was indisputable that except under that new proviso that sum of money which was included in the assessee's income could not have been included. But that contention was not raised before the Appellate Tribunal nor was any reference made to it in the question referred by the Tribunal to the High Court. But the High Court of Bombay allowed that contention to be raised for the first time on the hypothesis that that question of law was implicit in the question of law which arose from the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded was not raised before the Tribunal or before the High Court for the reason that it had not yet commenced to operate. But on the basis of the enunciation made in the Scindia Steam Navigation Company's case the Supreme Court allowed that contention to be raised, pointing out that the argument advanced on behalf of the department did not raise any new question which was not before the Tribunal, but presented a new aspect of a question which was in truth before the Tribunal and had been decided by it. The third decision of the Supreme Court which is on all fours with the case before us is Raja Sharda Narain Singh v. Commissioner of Income-tax. That was a case in which the assessee's father was a big zamindar and after his death in the year 1944 it was noticed by the Income-tax Officer that the assessee had been credited with a sum of two lakhs of rupees in the estate treasury of the assessee. The Income-tax Officer who was not satisfied with the explanation furnished by the assessee included that sum of money in the total income, and, although the Appellate Assistant Commissioner excluded that sum of money, the Appellate Tribunal restored the order of the Income-tax Officer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way in which the Tribunal in that case was of the opinion that the sum of two lakhs of rupees had to be added to the income of the assessee in respect of the assessment year 1949-50, the Tribunal in the case before us was of the opinion that the income of the assessee from undisclosed sources should be added to the income pertaining to the assessment year 1959-60. Neither in the one case nor in the other was an argument advanced before the Tribunal that that income was the income of the relevant financial year, and so could not form part of the income concerning the assessment year. But the question whether the inclusion made by the Tribunal was right or not was not as explained a new question but was only an aspect of the question which actually was before the Tribunal although it had not been raised before it. We are, therefore, of the opinion that the second question before us did arise out of the order made by the Tribunal and our answer to that question is in favour of the assessee. So, Mr. Rajasekhara Murthy and Mr. Srinivasan submit that our answer to the second question dispenses with the necessity to answer the first, and we, therefore, do not answer it. Our answer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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