9911796707
TMI Blog1983 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... hink that the application should be allowed. The assessee is an HUF. In respect of the assessment year 1972-73, the ITO reopened proceedings as he was of opinion that the house purchased on November 16, 1971, in the name of Ayodhya Prasad, who was the karta, was in fact, purchased by the undisclosed funds of the assessee. An affidavit was filed by the son of Ayodhya Prasad before the ITO that his father had agricultural property and money-lending business from which he had independent income. It was also stated that his mother had savings. And the house was purchased from the funds so available. The Tribunal did not place any reliance on the affidavit, as according to it, it contained arguments and not facts. Further, while considering an unexplained investment of Rs. 25,000, which was another deposit, the Tribunal found that the assessee carried on cloth business with capital of Rs. 17,000 only, and therefore, its income was nominal. And the income from agricultural property and money-lending business must have been consumed by the family. Therefore, according to the Tribunal, it was not possible to accept that Ayodhya Prasad had Rs. 13,500 from which he could have purchased t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as three questions were initially posed. The controversy, as canvassed before us, is whether the Tribunal was justified in upholding the view taken by the ITO as well as the AAC, that the assessee had failed to establish that the investment of Rs. 13,500 in the house purchased on November 16, 1971, was not from undisclosed sources. The assessee had claimed that the property was purchased by Ayodhya Prasad, the karta, from his own sources. Proceedings for the year in question were commenced by a notice under s. 148 of the Act. The assessee claimed, in the return filed by it, that the income from the property was that of the family. The income was, in fact, treated to be one of the assessee itself, which remained unchallenged by it. During the course of the proceedings for the assessment years 1973-74 and 1974-75 an affidavit was filed in which it was asserted that the house property had been acquired by Ayodhya Prasad after the death of his wife, Sona Devi, to fulfil her wish, from the money accumulated during her lifetime. This statement is contained in para. 6 of the affidavit sworn on July 8, 1976. The ITO disbelieved this assertion in the absence of any evidence as to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mere bald assertion without any material being brought on the record to justify it. Or, that some statable question of law must be discovered in the order of the Tribunal even though the triable issue before the Tribunal is essentially a question of fact. Can it be overlooked that a question basically of fact cannot be justified as one of law merely because it is couched in a language simulating that character. And that is what has been the assessee's endeavour in the present case. Where judicial opinions vary, recording of separate reasons is the only mode of expressing the diversity in thought. Else, the judicial process would lose much of its worth. There is no room for any other option. To conclude, I would dismiss the applicaton. BY THE BENCH (Order dt. 16-3-1983).-In view of the difference of opinion amongst us, we direct that the papers of this case be laid before the Hon. the Chief justice for listing before an appropriate Bench. H. N. SETH J. (26-4-1983).-By this application under a. 256(2) of the I.T. Act, the assessee, M/s. Singhai Ayodhya Prasad Lakhpat Rai, Jhansi (HUF), prays that in respect of its assessment for the year 1972-73, the Income-tax Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in the case of Jasbir Singh Dhillon v. Union of India, AIR 1981 SC 1765, and urged that in this case the Supreme Court has ruled that in a case where the two judges constituting the Bench differed on the question whether the petition should be dismissed in limine or the rule should be issued and the matter is referred to a third judge, the petition should not be dismissed in limine and that the rule must be issued so that the controversy may be decided after hearing both the parties. I am unable to accept the submission made by the learned counsel. In the first place, there is material difference between a petition under art. 226 of the Constitution, which is scrutinised by the court at the preliminary stage with a view to determine whether or not the respondent should be called upon to put in an appearance, and an application under s. 2546(2) of the I.T. Act which comes up for final disposal after notice to the respondent and is being so disposed of after hearing both the parties. After the notice of an application filed under s. 256(2) of the I.T. Act has been issued and it is to be disposed of after hearing both the parties, it cannot be said that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of this court. I have, after carefully going through the opinion of the learned judges as also hearing the counsel for the parties, come to the conclusion that in this case a question of law, on which a statement of the case can be called from the Income-tax Appellate Tribunal, does arise and I proceed to state my reasons for this conclusion. The assessee, M/s. Singhai Ayodhya Prasad Lakhapat Rai, Jhansi, is an HUF. By means of a notice dated 24th of January, 1980, the ITO reopened the assessee's assessment for the year 1972-73 on the ground that he had reasons to believe that some part of its income for that assessment year had escaped assessment. In response to the notice issued by the ITO, the assessee filed a return including therein the income derived by it from a house purchased in the name of Ayodhya Prasad, karta of the family, on 16th of November, 1971, for a sum of Rs. 13,500. During the course of the assessment proceedings, the ITO sought to include a sum of Rs. 25,000 invested by the assessee in that year in its cloth business as also the sum of Rs. 13,500 invested in purchasing the house on 16th November, 1971, as the assessee's income from undisclosed sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the karta of the HUF acquired the asset from out of the HUF, the source whereof had remained unexplained. The AAC accordingly modified the assessment made by the ITO and granted relief to the assessee to the extent of Rs. 17,500. Both the assessee and the Department went up in appeal before the Income-tax Appellate Tribunal, Allahabad. The Appellate Tribunal by its judgment dated 5th of January, 1982, dismissed both the appeals and confirmed the order passed by the AAC. The controversy involved in the question in respect of which the assessee has pressed this application under s. 256(2) of the I.T. Act merely concerns the investment of Rs. 13,500 made in purchasing the house on 16th of November, 1971, in the name of Ayodhya Prasad. Whereas the case of the assessee was that the said property had been purchased by Sri Ayodhya Prasad from out of his personal funds and that it belonged to him individually, the case of the Revenue was that the said property had been purchased in the name of Ayodhya Prasad, the karta of the assessee, from out of the HUF funds, the source of which had remained unexplained. In support of its case, the assessee had placed strong reliance on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that the property belonged to Ayodhya Prasad individually cannot be accepted in view of the fact that the assessee itself had treated the income of the property as its own income in the returns for the year 1972-73, filed by it on solemn verification. 2. The fact that the property had been purchased in the name of the karta, Sri Ayodhya Prasad, or some other member of the family is not of much consequence as the property belongs to the HUF had necessarily to be purchased in the name of the karta or some other member of the family. 3. Once it was held that the property belonged to the HUF the onus to explain the nature and source of the investment in purchasing the property lay on the HUF and not on any one else. So far as the third reasoning given by the Tribunal is concerned, it proceeds on the assumption that if the property belonged to the HUF, it must necessarily have been purchased from its own source of income and accordingly the onus to disclose that source lies upon the assessee and in case the assessee is unable to discharge that onus it can be taken that the investment was made from income derived from other unidentified sources. It is not unusual that a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt applied the aforesaid dictum in the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349, where the Income-tax Appellate Tribunal had arrived at the conclusion that the amount of Rs. 5,00,000 in fixed deposit in the name of Biswanath was the concealed income of the respondent-firm on the following circumstances (p. 358): " 1. Explanation furnished by Biswanath with regard to the source of Rs. 5,00,000 in proceedings relating to his personal assessment was found to be incorrect. 2. The transfer of the two amounts of Rs. 5,00,000 each from Calcutta to Bombay and thereafter to Jamnagar and the issue of fixed deposit receipts by the bank in the names of the sons of the partners of the respondent firm. 3. The use of the above-mentioned two receipts as collateral security for the overdraft facility of Rs. 10,00,000, afforded to the respondent-firm. " and the High court had taken the view that the above material was not sufficient for holding that the sum of Rs. 45,00,000 belonged to the respondent-firm and that the Tribunal had taken into consideration material which was not relevant to the issue. The question that arose for consideration in the Supreme Court was whether in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of the case should and can be called from the Income-tax Appellate Tribunal. In the result I would reframe question No. 2 proposed by the applicant thus : " Whether, on the facts and circumstances of the case, the Tribunal was legally justified in holding that the property purchased in the name of Sri Ayodhya Prasad had actually been purchased from out of the funds belonging to the Hindu undivided family and the burden to explain the source from which the said fund was acquired lay upon the assessee-Hindu undivided family? " and call upon the Income-tax Appellate Tribunal, Allahabad, to draw up a statement of the case and refer the aforesaid question of law for the opinion of this court. Let the opinion given by me above be placed before the Bench concerned for passing necessary orders. BY THE COURT (21-7-1983).-In view of the opinion received by the third hon'ble judge, we direct the Income-tax Appellate Tribunal, Allahabad Bench A, Allahabad, to submit a statement of the case on the following question of law : " Whether, on the facts and circumstances of the case, the Tribunal was legally justified in holding that the property purchased in the name of Sri Ayo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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