9911796707
TMI Blog1976 (9) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 from B. U. A. in cash on 3rd August, 1953, and had paid a sum of Rs. 13,64,250 to J. T. on 7th August, 1953, also in cash. When asked to disclose the source from which this money came, the assessee said that earlier, in May, 1953, he had sold 3A-class preference shares of Bennett Coleman Co. Ltd. (another company controlled by him) to J. T. for Rs. 14,02,019. Of this amount a sum of Rs. 14 lakhs was paid in cash by J. T. to B. U. A. on 6th May, 1953, to be held by the latter to the credit of the assessee's account, and the balance of Rs. 2,019 was paid in cash directly to him on the same day. According to the assessee, he drew a sum of Rs. 13,65,000 in cash on 3rd August, 1953, from B. U. A. out of the amount thus lying with that company to his credit, and utilised it to pay Rs. 13,64,250 to J. T. in cash on 7th August, 1953, for the purchase of 2,14,000 ordinary shares of Dalmia Jain Aviation Ltd. In support of this explanation the assessee produced some vouchers and correspondence in addition to his own account books. The account books of J. T. were not produced as they were said to have been destroyed and the company had gone into liquidation. These of B. U. A. were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accountant of the assessee, was examined. He proved some correspondence pertaining to the transactions. However, when questioned by the Income-tax Officer, he was unable to say how the amount of Rs. 14,02,019 had been brought in cash from Sawai Madhopur, where the head office of J. T. was situated, to Delhi for being delivered to B. U. A. As regards the sum of Rs. 2,019 alleged to have been received in cash by the assessee directly from J.T., Dudani said that he had received it from R. Sharma, a director of J. T. It transpired that R. Sharma had already died, and so could not be examined. The Income-tax Officer considered all the material placed before him and, in an order dated 23rd August, 1963, again held that the sources of the cash credits in the assessee's books, which were previously added to his income, had not been satisfactorily explained. Consequently, he substantially maintained the earlier assessment except as regards an item of Rs. 7,15,533 with which we are not presently concerned. But in making the computation he mistakenly included a sum of Rs. 14,00,000 in the income of the assessee instead of Rs. 14,02,019, which was the amount actually received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional evidence was admitted. At the same time the Tribunal thought that it was only fair that the assessee should be given an opportunity to explain the additional evidence and also certain other matters which it narrated in its order. The Appellate Assistant Commissioner was, therefore, directed to record such further evidence as the assessee may wish to produce and forward it to the Tribunal. Pursuant to this direction, the Appellate Assistant Commissioner submitted his report dated 24th May, 1969. No evidence was tendered before him, but it was contended that the copies of the balance-sheets and profit and loss accounts of J. T., admitted as additional evidence, were not authentic. After examining the assessment record of J. T., where the original documents had been filed, the Appellate Assistant Commissioner held that the documents were genuine. Furthermore, he found from a scrutiny of the balance-sheets and assessment orders for the earlier years that J. T. had carried on no business at all, and, in particular, had never dealt in shares. He, therefore, concluded that there was no such transaction of sale of shares to J. T. as was alleged by the assessee. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for referring questions of law to the High Court. On 10th March, 1972, the assessee moved an application asking for the reference of five questions of law said to arise out of the order of the Tribunal made on 13th December, 1971. By another application dated 5th August, 1972, three more questions were sought to be raised, In this way the total number of questions swelled to twenty. All the applications for referring questions of law to the High Court were dismissed by the Tribunal by its order dated 24th February, 1973. Question No. 8 in the application of 6th July, 1970, was not pressed by the assessee. The Tribunal held that other questions formulated in this application were not questions of law and could not, therefore, be referred. The applications of 24th September, 1970, and 15th October, 1970, were found to be barred by time and were rejected on that ground. Even otherwise it was held that the questions stated in these applications were not of a kind as could be referred. For similar reasons the application of 5th August, 1972, was also dismissed. As regards the application of 10th March, 1972, it was held that it was not maintainable as the rectification order of 13th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the next sentence it was said : "It is not the law that, when once the explanation is rejected, it automatically follows that the receipts are income", but this must be understood in the light of the next two sentences, which read : "Whether an explanation is acceptable, and if not, whether it should be inferred that the receipts constitute income, are different aspects of the same question. Both these aspects are interrelated, and the question whether such receipts constitute income or not has to be decided on a consideration of all the relevant facts and circumstances of the case." Far from showing that there are two separate and distinct questions, this case decides that there is only one, albeit multifaceted. Perhaps, what the court really meant emerges more clearly from the succeeding passage which is as follows : "It is quite legitimate in the case of an assessee who is known to be carrying on several activities of an income-earning character or who can be reasonably be found to be involved in such activities, to draw the inference that the amounts found with him constitute income from undisclosed sources, in the absence of satisfactory explanation regarding their s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a firm. As collateral security for the overdraft account of the firm with a bank, Biswanath, the son of a partner of the firm, had furnished a fixed deposit receipt for Rs. 5,00,000. The source of this money was not satisfactorily explained, and was treated by the taxing authorities as the income of the assessee-firm. The High Court held that there was no material before the Tribunal on the basis of which such an inference could be sustained. Affirming the judment of the High Court, the Supreme Court said : "The falsity of the above explanation of Biswanath, in the opinion of the High Court, did not warrant the conclusion that the amount of Rs. 5,00,000 belonged to the assessee. We call find no flaw or infirmity in the above reasoning of the High Court. The question which arose for determination in this case was not whether the amount of Rs. 5,00,000 belonged to Biswanath, but whether it belonged to the respondent-firm. The fact that Biswanath was not able to give a satisfactory explanation regarding the source of Rs. 5,00,000 would not be decisive even of the matter as to whether Biswanath was or was not the owner of that amount. A person can still be held to be the owner of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and failed to take notice of material which was relevant. If this were true there would be ground for requiring the Tribunal to make a reference : See Commissioner of Income-tax v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC). But beyond making these assertions counsel for the assessee could point to nothing in support of his submissions. We were not told what was the irrelevant material that the Tribunal had considered or the relevant material which it had ignored. A cursory reading of the Tribunal's order is enough to show that there was a vast mass of material before it, which it dealt with thoroughly. If there is some evidence before the Tribunal to support its finding, the High Court has no power to require a reference even though it does not concur in the conclusion: See Commissioner of Income-tax v. Daulatram Rawatmull [1964] 53 ITR 574 (SC). Here the material was overwhelming and the conclusion irresistible. Although, these were the main points argued on behalf of the assessee, in passing it was submitted, that after the first assessment order was set aside by the Appellate Assistant Commissioner, the Income-tax Officer could not travel beyond the confines of the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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