GOPALDAS T AGARWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee pursuant to the application of the applicant the High Court had required the Tribunal to refer the following question for our determination :

(2.) ASSESSEE , Lala Gopaldas T. Agarwal, is the legal heir of late Lala Tulsiram Devidayal who died on 9th March, 1960. Lala Gopaldas is an assessee in his representative capacity in respect of income of his father, late Lala Tulsiram. The question relates to the asst. year 1957 58, for which the corresponding previous year ended on 31st March, 1957. Tulsiram filed a return of his income for the asst. year 1957 58 on 27th June, 1958, disclosing an income of Rs. 28,057 as under :

(3.) THE assessee on behalf of the estate of Tulsiram preferred an appeal before the Tribunal. It was urged on his behalf that he was handicapped in that he did not know all the data relating to the assessment of his father's estate and that in the circumstances he had done the best he could to indicate the possible source of the two assets which formed the wealth of his father as on 31st March, 1957. It was stated on his behalf that Gopaldas had declared the value of jewellery owned by his father on 31st March, 1957, because, in pursuance of his father's will, he had come into possession of the jewellery, the bulk of which was sold and disposed of according to his father's wishes after his death. The value of jewellery was more or less accepted by the estate duty authorities and the position, therefore, could not be disputed that the jewellery belonged to Tulsiram. It was contended on his behalf that the funds from which the assets worth Rs. 1,70,000 were acquired by Tulsiram were three fold. First, it was said that Tulsiram was assessed on large incomes and even from the asst. yrs. 1948 49 to 1957 58, the total income assessed was Rs. 4,78,072. This included income accruing to his wife from the trust created by Tulsiram himself and this income itself was about Rs.1,75,927. It was urged that there was nothing improbable in Tulsiram acquiring jewellery worth Rs.1,50,000 and having cash balance of Rs. 20,000. Secondly, it was urged that Tulsiram had made considerable withdrawals from the business in which he was interested and in the year 1959 itself he had withdrawn an amount of Rs. 2,67,000 which could have been utilised for purchase of jewellery. Lastly, it was urged that Tulsiram had admitted in 1949 that his wife possessed jewellery worth Rs. 15,000 as on 31st March, 1948. His wife died in 1956 and the jewellery was acquired at the time of his marriage more than 30 years ago. At that time the price of gold per tola was Rs. 20. It was said that in the statement made in the year 1949, the value of Rs. 15,000 was shown at the original cost and that jewellery would have been worth more than a lakh of rupees by 31st March, 1957. It was made clear before the Tribunal that these alternative contentions were urged on behalf of the assessee on probabilities because the assessee did not have particulars of the withdrawals of Tulsiram or his expenditure or his acquisition of assets like jewellery. On these submissions, the addition of Rs.1,70,000, it was said, was not justified. On the other hand, it was urged on behalf of the Revenue that no satisfactory account of the acquisition by Tulsiram of jewellery worth Rs.1,50,000 had been given by the assessee. It was also urged that in the statement that was filed in the year 1949 jewellery as on 31st March, 1948, which included jewellery belonging to Tulsiram and his wife was not shown at cost but was shown at its real worth as on 31st March, 1948, and having regard to the movement of the price of gold between 1948 and 1957 there was no noticeable rise which could explain the acquisition of jewellery worth Rs. 1,50,000 by Tulsiram as on 31st March, 1957. Further, it was urged that the vouchers of sale that were brought on record indicated that what was sold was gold and not jewellery and that even in the Dharam Kanta certificates and bills or refinery there was no mention of ornaments or jewellery. It was also urged on behalf of the Revenue that Tulsiram had disposed of some gold and jewellery worth Rs. 49,000 in order to meet his taxes and, therefore, the bulk of jewellery that was shown in the statement of the year 1949 as belonging to Tulsiram and his wife would have been utilised for payment of taxes. Reference was also made to the statement of total wealth made by Tulsiram on 16th May, 1954, giving particulars of the wealth of Tulsiram as on 30th Oct., 1951. In this statement jewellery was valued at Rs. 15,000 and that cash was shown at Rs. 2,000. Reference was also made to the fact that Tulsiram had not withdrawn any sizable amounts which were invested in tangible assets and that the withdrawal up to and including the large withdrawal in 1951 would have been used away either in secret investments or in personal expenditure. In short, it was urged on behalf of the Revenue that he certainly failed to give a complete account of income and disbursement of Tulsiram and he had also failed to give any details of purchase of jewellery which was held by Tulsiram as on 31st March, 1957.