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TMI Blog1974 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... xecuted by his late uncle. The papers also disclosed that there were six chit transactions with the same bank in the name of the assessee and his relatives. When asked to explain the origin and source for the pronote loan the assessee wrote to the Income-tax Officer on October 10, 1958, stating that it comprised of his savings left with S. V. Rao and the loans obtained by the assessee from the Premier Bank Ltd. but utilised by S. V. Rao for his personal purposes. On October 23, 1958, the assessee was examined and in his statement he had stated that in 1949 the amount due from S. V. Rao in respect of deposits left with him was Rs. 31,000 and a sum of Rs. 12,006 was due from Rao towards the balance of the borrowings of Rs. 25,000 from the bank but utilised by Rao. In respect of the chit transactions he had stated that they were all taken by Rao with the ostensible purpose of utilising the matured amounts to pay off the sums due to the assessee and that the chits were taken in the name of the assessee and his relations as the managing director of the bank was precluded to open chit accounts. Another explanatory statement was filed by the assessee through his chartered accountant on No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited with the assessee. The suit was filed some time in 1952 for the entire sum of Rs. 50,000 with interest and a decree was obtained for Rs. 53,417 in November, 1953. But it was given in the statements that the balance of the loan of Rs. 14,000 borrowed from the bank was discharged on February 2, 1952, with the amounts received when the other chits matured. The Income-tax Officer also rejected certain other papers produced by the assessee as evidencing the dealings between Rao and the assessee as they did not bear the signature of Rao. The Income-tax Officer accordingly was of the view that the chit transactions were that of the assessee and that the sum of Rs. 50,000 for which the promissory note was executed by Rao should have been advanced by the assessee from out of his earnings which have not been accounted for. In the result, he added a sum of Rs. 9,393 which was the amount contributed towards the chit transactions during the previous year relevant to the assessment year 1950-51 and made a reassessment order accordingly. In respect of the assessment year 1951-52 the discharge of the loan of Rs. 11,000 to the Premier Bank which fell within the previous year to that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer passed orders on October 29, 1963, revising the assessments. In the penalty proceedings initiated by notice dated March 17, 1960, the assessee contended that there was no concealment, that the assessee was merely a benamidar for Rao and that he was unable to prove his case due to the death of Rao and that, therefore, no penalty could be levied. The Income-tax Officer held that the increase in wealth of the assessee disproved the claim of benami and that there was a deliberate concealment of income. He accordingly levied penalties of Rs. 4,800, Rs. 4,500, Rs. 6,100 and Rs. 3,400, respectively, for the assessment years 1950-51 to 1953-54. The Appellate Assistant Commissioner confirmed this order. Before the Tribunal, the assessee contended that since the Appellate Assistant Commissioner, in the appeal filed against the reassessment orders, set aside the original assessment and directed a revised assessment to be made and the revised assessment orders having been made only on October 29, 1963, after the coming into force of the new Act (Income-tax Act, 1961), penalty proceedings, if at all, could be taken only by the Inspecting Assistant Commissioner under the new Act. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n at Rs. 75,000 and directed it to be spread over a period of four years and the additions thus made in the respective assessment years are, therefore, ad hoc additions. Thus, according to the Tribunal, there was an element of estimate as to the amounts as also in regard to the period to which the income was referable. The Tribunal also took note of the fact that the existence of this wealth was given by the assessee in the original assessment proceedings for 1958-59. Ultimately, the Tribunal held that this is not a case where the provisions of section 28(1)(c) can be said to be applicable. The department filed an application for reference and the Tribunal has referred the following question: "Whether, on the facts and in the circumstances of the case, the provision of section 28(1)(c) of the Indian Income-tax Act, 1922, was not applicable for the assessment years 1950-51 to 1953-54 ?" The assessee while opposing this reference further submitted that if a reference was to be made the following question should also be referred: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the penalty proceedings were properly ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disproportionate to the income assessed during the relevant year it is for the assessee to prove that the acquisition was not with the income received during the assessment year in question. The acquisition of the property and the source from which the property was acquired are all within the exclusive knowledge of the assessee and he cannot merely plead that the onus is on the department to prove concealment and keep quiet. Further, in this case the Tribunal on the earlier occasion had already held that the accretions were referable to the assessment years 1950-51 to 1953-54 and that order is not liable to review. The Income-tax Officer and the Appellate Assistant Commissioner have held that the explanation given by the assessee was contradictory, that an increase in wealth disproved the claim of benami and that, therefore, there was a deliberate concealment of income. It is true that the Tribunal on the earlier occasion in section 34 proceedings directed the allocation among the various assessment years on certain ad hoc basis. If the Tribunal in the present proceedings is not satisfied with the estimation and allocation it is bound to give a finding as to whether there is any c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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