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TMI Blog1995 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... names of Shri Biswajit Mohanty and Shri Satyajit Mohanty ?" The facts of the aforesaid cases reveal that for the assessment year 1979-80, the assessee had shown two cash credits in the names of his two minor sons, namely, Biswajit Mohanty and Satyajit Mohanty, to the tune of Rs. 40,000 each and for the assessment year 1981-82, the Income-tax Officer found that there was a cash credit of Rs. 20,000 in the name of Smt. Nirupama Mohanty, the wife of the assessee. These were added to the income of the assessee. However, the Commissioner of Income-tax (Appeals) held that the cash credits were proved and deleted the additions made by the Income-tax Officer. The Income-tax Appellate Tribunal confirmed the order of the Commissioner of Income-tax (Appeals). The Tribunal took into consideration all the facts and circumstances of the case and thereafter made a reasoned order that the cash credits were proved. Hence, the present questions have been referred. Mr. A. K. Ray, the learned advocate appearing for the Revenue authorities, has very strenuously argued the cases before us. He has mainly argued that the question as to whether the assessee has been able to discharge the onus as envisage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, the identity and the creditworthiness of the donors to the said trust. It was contended on behalf of the assessee that the said trust which came into existence was a separate and distinct entity and the assessee was only holding an executive post in that trust. It was held by the Tribunal that seven persons who were designated by the Income-tax Officer as benamidars of the assessee for the purchase of the shares of Kalinga Tubes Ltd. were not benamidars and the money required for the purchase of these shares had been raised by themselves. The Tribunal held that the investments made by the trust in the assessee's group of industries or with the assessee were from its own resources and funds and such investments were guided by business expediency and prudence. The finding of the Tribunal is that the trust was comprised of persons of public repute and the control and management of the trust styled as 'Kalinga Foundation Trust' were under the effective control of the board of trustees comprised of persons of public reputation. The Tribunal accordingly held that the income from interest, dividend or any other usufruct arising out of the investments made by the trust in the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts. Where is the question of truthfulness about a fact or a material fact, which, to the knowledge of the assessee, was non-existent or not there at all ? Further, I am of the considered opinion that the facts or the material placed by the petitioner-concern before the Income-tax Officer at the time of its initial assessment does not amount to any 'disclosure' in the light of the Explanation to section 147 of the Act. This Explanation reads: 'Production before the Income-tax Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this section.' For the reasons recorded above, I find no merit in these two petitions and dismiss the same with costs, which I determine at Rs. 300 in each case." In essence, the entire spirit of the argument of Mr. Ray, on behalf of the Revenue authorities, is that looking at the facts of the cases in depth and detail and considering the background of the cases, the approach of the Tribunal is absolutely bad in law and merely because there is an assessment made in the names of the wife and minor so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to annul that assessment, but it has not been done. A particular income cannot be taxed twice and reliance is placed in this respect on Dayabai (Smt.) v. CIT [1985] 154 ITR 248 (MP) and Sri Krishna Das v. Town Area Committee [1990] 183 ITR 401 (SC). Suspicion, according to Mr. Ratho, however strong it may be, cannot be treated as evidence. The Assessing Officer may act on evidence, direct or circumstantial, but not on mere suspicion, gossip or rumour. The normal presumption is in favour of good faith and this presumption applies to the bona fides of the assessee's transactions as well as his accounts. Considering the submissions made on behalf of the assessee as well as for the Revenue authorities, we find that section 68 of the Income-tax Act lays down : " Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer. satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." The explanation to be given by the assessee has to be to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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