COMMISSIONER OF INCOME TAX Vs. KODURI PAPA RAO

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Hyderabad Bench, has, at the instance of the Commissioner of Income-tax, submitted under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the Act"), a statement of case for our opinion on the following question :

(2.) IN order to appreciate the scope of the question, it is necessary to briefly refer to the material facts found by the Appellate Tribunal. The assessee, an individual doing contract business, had purchased a house in May, 1951, for a sum of Rs. 29,500 in the name of his minor son. For the assessment year 1952-53, the relevant accounting year being the financial year ending with March 31, 1952, one of the questions that fell for consideration before the INcome-tax Officer in the assessment of the assessee's income was whether the assessee had explained the source of Rs. 29,500 used for the purchase of the house in May, 1951. The assessee gave three inconsistent explanations. Firstly, it was stated that the amount of Rs. 29,500 represented dowry given at the time of the marriage of his minor son. Coming to know that his son was not married by May, 1951, and finding that the explanation offered by him was patently false, he changed his version and stated that the amount represented savings made by his wife out of the sum of Rs. 1,000 which her parents used to send her annually. That explanation also was not accepted by the INcome-tax Officer as no reliable and tangible evidence was adduced in support of the same. Thereupon, the assessee fell back upon a statement of his total wealth wherein it was shown that he had a cash balance of Rs. 50,000 as on March 31, 1951. According to the assessee, the investment of Rs. 29,500 came out of the cash balance indicated in the total wealth statement. The assessing authority, rejecting the different conflicting versions of the assessee relating to the source of the sale consideration of Rs. 29,500 added the same as income from undisclosed sources. The addition was sustained by the Appellate Assistant Commissioner and the INcome-tax Appellate Tribunal.

(3.) THE Tribunal, as per our direction dated October 8, 1971, has submitted a further and fuller statement of its case. THE Tribunal has stated that the deficiency in cash as on April 1, 1951, referred to in the order of the Income-tax Officer was a factor taken into consideration by it in the assessment proceedings to hold that there was no surplus cash available with the assessee as on March 31, 1951, and the balance shown as per wealth statements was inflated. That particular aspect disproved the third explanation of the assessee regarding the source of the purchase money. That is not a new or additional factor or evidence to be taken into consideration. In substance, the Tribunal has categorically stated that except the falsity of the explanation of the assessee relating to the source of Rs. 29,500 utilised for the purchase of the house in May, 1951, there was no other material or evidence to show or prove that the amount of Rs. 29,500 was really the assessee's concealed income.