9911796707
TMI Blog1982 (7) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the applicant assessable under section 69 of the Income-tax Act, 1961, on the ground that the applicant had not explained the source of its acquisition ? (2) Whether the finding that the sum of Rs. 1,06,066 (Rupees one lakh six thousand and sixty-six) represented income of the applicant is based on suspicion, surmises and/or improper consideration of the evidence on record and is, therefore, unjustified in law ? " The facts giving rise to this reference are as follows : The assessee is a Hindu undivided family (HUF) and one Kacharulal Tejmal, after whom the HUF is named, was the karta of the HUF. The assessment year with which we are concerned is the assessment year 1962-63 and the relevant previous year was the Samwat year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee, these goods pledged with the banks did not belong to the assessee but to Ramanlal & Company. However, according to the books of account of Ramanlal & Company, the stocks of that firm as on 8th November, 1961, were as below : ------------------------------------------------------------------ Bales Bojas Raw Cotton No. Value No. Value Weight in Qt. Value ------------------------------------------------------------------- Rs. Rs Rs. Khamgaon 30 6,000 24 10,250 158 15,250 (50 Qts.) Jalna 18 7,650 103 45,150 680 68,000 (215 Qts.) ------------------------------------------------------------------- This would show that on 8th November, 1961, Ramanlal & Company had only 48 fully pressed bales of cotton in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not, in the opinion of the ITO, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. It is quite clear that in the present case the ITO rejected the explanation given by the assessee that the aforesaid bales of cotton pledged by the assessee in its overdraft accounts belonged to Ramanlal & Company, and added the aforesaid amount of Rs. 1,06,066 to the income of the assessee on the footing that the said bales represented unexplained investment by the assessee in the relevant previous year. The appeal preferred by the assessee against this order to the AAC failed and so did the appeal preferred by the assessee to the Income-tax Appellate Tribunal, save regarding some minor adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. No affidavit was produced of any of the other partners of Ramanlal & Company to show that these goods belonged to Ramanlal & Company. Stocks shown in the books of Ramanlal & Company not only failed to support the explanation given by the assessee but contradicted the same, because this stock statement established that on 8th November, 1961, Ramanlal & Company had only 48 bales of fully pressed cotton in its godown, whereas a much larger quantity of such bales was pledged by the assessee in its overdraft accounts. We may mention that even the explanation of the assessee that some of the raw cotton belonging to Ramanlal & Company was in the process of being converted into bales and that it was this raw cotton which was shown by the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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