S HASTIMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred under section 66 of the Indian Income-tax Act is :

(2.) THE assessee was a partner of the firm of Messrs. Hastimal Jayantilal and Co., Coonoor. THE firm was dissolved in 1952 and the assessee thereafter carried on business in his individual capacity. In the course of assessment proceedings of the firm it was noticed that the assessee had invested therein a capital of Rs. 63, 000 during the period July, 1947, to November 1947. THE assessee represented that he contributed the capital by borrowing from third parties. THE Income-tax Officer was satisfied that to the extent of a major portion of the amount the assessee's version was true. He, however, did not accept the case of the assessee in respect of a borrowal of Rs. 25, 000 from one Vijayaram Ganeshdas of Bikaner. He initiated proceedings under section 34 of the Act in regard to the assessment year 1948-49. THE explanation of the assessee that Rs. 25, 000 was obtained as a loan from Vijayaram Ganeshdas was not accepted. THE Income-tax officer held that the assessee failed to prove "beyond doubt" the origin of the credit of Rs. 25, 000. THE said amount was treated as income of the assessee from undisclosed sources for the year 1948-49.

(3.) IN regard to the balance of Rs. 10, 000, the assessee had no consistent case. His first submission was that the sum of Rs. 9, 000 which was left in his hands after depositing Rs. 16, 000 in the bank at Jodhpur together with an addition of Rs. 1, 000, which he had, totalling Rs. 10, 000, was deposited with a banker, Sagarchand Sujanmull of Phalodi, and on the security of this deposit he withdrew Rs. 10, 000 from Sagarchand Sujanmull at Madras. Before the Appellate Assistant Commissioner he stated that he made a mistake in trying to connect his capital contribution to the Coonoor firm with the money that he obtained from Sagarchand at Madras. According to him the truth was that out of Rs. 9, 000 which remained with him from the borrowing of Vijayaram Ganeshdas he retained a sum of Rs. 8, 000 by means of a bank draft to one Poonamchand Gulabchand of Bombay. This Poonamchand was a creditor of the Coonoor firm. The amount of Rs. 8, 000 was adjusted by Poonamchand towards the amount due to him from the Coonoor firm. The assessee, therefor, obtained a credit in the firm's accounts for this sum of Rs. 8, 000.This is the version of the assessee regarding the origin and source of his capital contribution to the firm of Hastimal. The question is whether there are materials to support the finding of the Tribunal that Rs. 25, 000 or any part thereof should be deemed to be income of the assessee from undisclosed sources.