GANESH PRASAD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a case stated under section 66 (2) of the Income-tax Act, 1922 (hereinafter referred to as the Act). The question referred is :

(2.) THE material facts are these : THE assessment is in the status of an individual. THE assessee was a partner holding a share of Rs. 0-5-4 in a rupee in the firm, Ganesh Prasad Tribeni Prasad. THE previous year of the said firm relevant to the assessment year 1947-48 was the one which commenced on the 14th of April, 1946. On the first day of the accounting year of the firm, i.e., on the 14th April, 1946, the capital account of the assessee in the books of the firm was credited with the sum of Rs. 18,005. THE assessee was called upon to explain the source, nature and the character of the cash credit. THE assessees explanation was that this was out of the money and ornaments brought from Rangoon in 1943. THE assessee had left Rangoon because of enemy action. THE assessee and the other partner, Tribeni Prasad, who was also in Rangoon at that time, were forced to leave for India. Tribeni Prasad and the assessee had brought jointly to India the sum of Rs. 20,000 in cash and gold ornaments worth Rs. 16,000. THE gold ornaments were said to have been sold to a shopkeeper in Bara Bazar, whose name he did not remember, and it was out of these sale proceeds that the sum of Rs. 18,005 was deposited in the firm on the said date by the assessee in his personal account. In support of his explanation the assessee examined himself and two witness. THE explanation was disbelieved by the Income-tax Officer. THEre was a discrepancy between the witnesses on the vital matter of the alleged distribution of the sale proceeds. Having rejected the explanation, the Income-tax Officer treated the said cash credit as income of the assessee from an undisclosed source. On appeal, the Appellate Assistant Commissioner confirmed the assessment holding that the explanation given was unreliable. On second appeal, the tribunal, for the reasons given by it in dismissing the appeal filed by the other partner, Tribeni Prasad, who had given a similar explanation, rejected the explanation of the assessee and upheld the inclusion of Rs. 18,005 in the assessment of the assessee as income from an undisclosed source. THE application under section 66 (1) of the Act having been refused, this court directed the Tribunal to state a case, and that is how the matter is before this court.

(3.) INCOME-tax Officer to hold that the income must be concealed income. There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the INCOME-tax Officer is entitled to draw the inference that the receipts are of an assessable nature.