AKBERALLY ESUFALLY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question that stand referred to us is :

(2.) THE assessee is a partner in the firm of Messrs. Gulamally and Co., doing business as hardward merchants in Madras. At the time of the original assessment, the assessee did not disclose in his returns that he had made any investments or that he had any source of income other than his share in the above firm. Later, on however, information reached the Income-tax Officer that, during the financial year 1946-47, the assessee had made three fixed deposits of Rs. 50,000 each in the Bank of India at Palanpur. Originally, the entire sum of Rs. 1,50,000 was brought in for assessment in proceedings under section 34 of the Act, but, ultimately, the Tribunal directed the exclusion of two sums of Rs. 50,000 but sustained the adittion of only one sum of Rs. 50,000 which stood as fixed deposit in the name of the assessee and his son. It is not in dispute that this sum belongs to the assessee. In explanation of this deposit, the assessee stated that he had been withdrawing large sums from the partnership account and that on the eve of the date of the deposit he had a sum of Rs. 30,000 and odd which represented the saving out of the drawings. THE remaining sum of Rs. 20,000 was stated to have been realised by the sale of some jewellery in August, 1946. With these two sums, the deposit, of Rs. 50,000 was made on January 30, 1947. This explanation was not accepted by the Income-tax Officer. THE assessee purported to claim that the possession of the cash balance of Rs. 30,800 had been shown in his wealth statement filed in October, 1944. With regard to the sale of jewellery, the Income-tax Officer found that there had been considerable delay in the furnishing specific details, that the evidence of the person to whom the jewellery is said to have been sold was not satisfactory and that the raising of this amount in the manner claimed could not be credited. In conclusion the Income-tax Officer said that the assessee had no source of income at any place outside the taxable territory and that the origin of the unexplained deposited has necessarily to be traced to the taxable territory where in his business activities were being conducted. He accordingly included this sum. THE conclusion was accepted as valid by the Appellate Assistant Commissioner on appeal. On a further appeal to the Tribunal the Tribunal was also not satisfied that savings which had accumulated in the hands of the assessee even by 1944, could have been utilized for making the deposit in 1947. Nor was it prepared to accept the evidence of the person who claimed to have purchased the jewels. It observed that though the money had been banked in the Native state, the business of the assessee was all in British Indian and, that though the department had not proved positively that the assessee had any other particular source of income, it stood to reason that the bulk of the money should have been made in India. It confined the inclusions of this sum of Rs. 50,000 in the assessable income.