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TMI Blog1975 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 90, Naina Street, Kayalpatnam, belonging to the son-in-law of the assessee and found a sum of Rs. 1,70,000 in ten rupee notes kept in two boxes which were buried in the earth in an open place in the house. On information relating to the discovery of this amount and the admission by the assessee that the money belonged to him, the Income-tax Officer started assessment proceedings invoking his power under section 175 of the Act. He issued a notice under section 139(2) on January 11, 1965. In response to this notice, the assessee filed a return on January 19, 1965, admitting an income of Rs. 5,000 under the head of " Property income ". With reference to the sum of Rs. 1,70,000, it was explained on behalf of the assessee that he and his two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order, the Income-tax Officer had also issued a demand notice for paying a tax of Rs. 1,28,221.87. This amount was payable within ten days from the date of service of the demand notice. Since the tax was not paid, as demanded, within the time allowed, a show-cause notice was issued by the Income-tax Officer under section 221 of the Act and ultimately imposed a penalty of Rs. 6,400 equivalent to 5 per cent. of the tax. The assessee preferred appeals to the Appellate Assistant Commissioner against the assessment order and the penalty levied under section 221. The Appellate Assistant Commissioner confirmed the finding of the Income-tax Officer that the explanation of the assessee was not acceptable and that the sum of Rs. 1,70,000 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts of the remittances. And so far as the remittances after 1949 are concerned, since there were restrictions on the remittance, it would not be fair to expect any evidence of such remittances as they would be in the nature of clandestine remittances. The Tribunal also pointed out that if as large an amount of Rs. 1,70,000 is to be earned in the normal course of business, it would require a large amount of capital and there is no evidence of investment of such capital in India by the assessee. On these reasonings, the Tribunal held that there was no material for them to hold that the amount in question represented the income of the assessee. On this finding the Tribunal set aside the order of assessment. Consequently, the appeals filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the revenue contended that the finding of the Tribunal that there was no material for them to hold that the amount in question represented the income of the assessee was based on assumptions and presumptions and not on any legal evidence. He also contended that the Income-tax Officer and the Appellate Assistant Commissioner specifically relied on section 69A and, in fact, the Tribunal also held that section 69A was applicable, and in view of the provisions contained in that section the Income- tax Officer was right in drawing the inference that the sum of Rs. 1,70,000 represented the income of the assessee. On the other hand, the learned counsel for the assessee contended that the onus of proof under section 69A does not rest wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption that it was for the department to prove that the assessee could not have saved any money from the business in Ceylon or that the sum of Rs. 1,70,000 represented the income from any business carried on by the assessee in India. The explanation of the assessee, to say the least, had not been supported by any evidence, and the rejection of the explanation by the Income-tax Officer was, therefore, absolutely proper. The entire order of the Tribunal is vitiated by the fact that the finding is reached only by presumptions and assumptions and not on any relevant evidence or circumstance. Though we might have considered the question as to whether the mere rejection of the explanation of the assessee could lead to a presumption that the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that there was no evidence to support it or it was perverse or has been reached without due consideration of the several matters relevant for such determination. This was so held by the Supreme Court in Bai Velbai v. Commissioner of Income-tax [1963] 49 ITR 130 (SC). Since we have come to the conclusion that there was no material for coming to that finding we have to answer the first question referred to us in the negative and in favour of the revenue. In the view that the amount did not represent the income of the assessee, the Tribunal had allowed the appeals filed by the assessee in respect of the penalties levied under sections 271(1)(c) and 221 and dismissed the department's appeal preferred against the reduction of the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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