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TMI Blog1954 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1944-45 the Income-tax authorities found an item of cash credit in the books of the assessee in the name of one Kedarnath Agarwala. The amount of cash credit was ₹ 35,000 and the claim of Kedarnath was that he deposited the amount in two lots, one of ₹ 15,000 on the 16th of April, 1943, and the other of ₹ 20,000 on the 2nd of May, 1943. The Income-tax authorities treated the amount of cash credit as belonging to Kedarnath and interest of ₹ 1,120 was allowed to be deducted from the taxable income of the assessee. When the assessment for the year 1945-46 was taken up, the Income-tax authorities noticed that the amount of ₹ 35,000 was transferred by Kedarnath to his daughter Mosammat Chandra Kumari Devi. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the amount of ₹ 35,000 was secreted profit of the assessee and should be assessed to income-tax under the provision of Section 34 of the Income-tax Act. In this state of facts the Income-tax Appellate Tribunal has referred the following question of law for the opinion of the High Court:- "Whether on the facts and circumstances of the case there was definite information to the Department in consequence of which discovery was made that a sum of ₹ 36,120 escaped assessment in the assessment year 1944-45?" After hearing counsel for the parties we think that the question should be reframed in the following manner in order to bring out more effectively the real point in controversy between the parties:- " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amount standing in the name of the third party does not belong to that third party but belongs to the assessee. That is the principle laid down by a Division Bench of this Court in S.N. Ganguly's case [1953] 24 I.T.R. 16. There is decision to a similar effect in an earlier case Ramkinkar Banerji v. Commissioner of Income-tax [1936] 4 I.T.R. 108. Applying the principle to the present case we have formed the opinion that there is no material before the Income-tax authorities to justify the inference that the amount of ₹ 36,120 was secreted profits in the hands of the assessee. The onus of proving that this amount was secreted profits made by the assessee was certainly upon the Income- tax Department and, in our opinion, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argument addressed by the learned Standing Counsel that the assessee had deliberately given a wrong address in his account books so as to mislead the Department and to cover up the fact that he had made secreted profits. Turning now to the facts upon which the Appellate Tribunal relied we find it extremely difficult to hold that these fact constitute any material upon which to build up the inference that the sum of ₹ 36,120 represented the secreted profits of the assessee. The Appellate Tribunal states that Kedarnath was a man of no substance and that he was not able to show satisfactorily how he saved the amount of ₹ 15,000 from his professional earnings. It is also said that he failed to remember at what shop he sold the orn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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