JAYANTILAL KISHORILAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Indore Bench, Indore, has made this reference at the instance of the assessee under Section 256(1) of the I.T. Act, 1961, for the opinion of this court regarding the question of law referred to by them, which is reproduced below :

(2.) THE facts giving rise to this petition as per the statement of the case may be stated, in brief, thus. THE assessee is an individual. He derives income from liquor contracts and the share income from M/s. Kishorilal Ramlal. THE assessee had taken liquor contracts for Rs. 2,06,000. In the year under consideration, he filed a return on February 25, 1977, declaring a loss of Rs. 500. THE reasons for the loss was that the son of the assessee unnecessarily offered more money at the time of auction. It was also explained that the same contract was given by the Government in the next year for Rs. 1,76,000 only. THE ITO was not satisfied with the explanation of the assessee. THE ITO estimated sales at Rs. 5,15,000 and applied a gross profit rate at 7.5 per cent. Thus, the income was determined at Rs. 38,625. THE income from the firm was worked out at Rs. 7,356. Thus, the total income was computed at Rs. 45,680.

(3.) THE learned counsel for the petitioner contended that though ordinarily this court cannot interfere in a reference on questions of fact, in this case so far as the petitioner is concerned he has discharged the initial burden of proof of having suffered loss in support of which he had filed the certificate issued by the Sub-inspector, Excise, Kannod, dated August 1, 1981 (Annexure " D "), according to which it is clearly mentioned that in the year 1975-76, the petitioner who had taken country liquor contracts for different shops in different places had incurred a profit of Rs. 678.28 and a loss of 9,902.17. He, therefore, submitted that the respondents have not disputed the contents of this certificate by which the petitioner has prima facie discharged the burden of proof that he had sustained loss in the liquor contracts in that year. He, therefore, submitted that if the respondents wanted further proof in support of this certificate, they could certainly ask the petitioner to produce additional evidence in support of his contention. But so far as the initial onus to prove the loss is concerned, the certificate produced by him is the best evidence which he has tendered and thus he has discharged the initial onus to prove the loss, though he did not dispute that the burden to prove the loss did lay upon the petitioner. He, therefore, submitted that the question framed and referred to this court, as stated above, should be answered in favour of the assessee.