LAWS(CAL)-1980-9-27

B C PAUL Vs. COMMISSIONER OF INCOME TAX

Decided On September 12, 1980
B.C.PAUL Appellant
V/S
COMMISSIONER OF INCOME-TAX Respondents

JUDGEMENT

(1.) This reference under Section 256(2) of the I.T. Act 1961, arises out of the income-tax assessment of Sri Bhupesh Chandra Paul also known as B. C. Paul, the assessee, for the assessment year 1965-66.

(2.) The facts found and/or admitted in these proceedings are shortly as follows: In his return filed for the said assessment the year assessee disclosed receipt of Rs. 1,58,250 but claimed the same to be exempt from tax being casual receipts from horse racing. In support, the assessee filed copies of five betting memos in the letter-head of K. N. Chakraborty, a book-maker, recording that between the 21st November, 1964, and the 4th February, 1965, the assessee had on five different dates won in bets on horses sums aggregating to Rs. 1,58,250. In answer to queries of the ITO the assessee by his letter dated the 5th September, 1978 stated, inter alia, that he had been interested in racing for only a limited period, had visited the races with a friend since deceased, had consulted the books and lists of the Royal Calcutta Turf Club and had placed bets from his office with the said bookmaker, K. N. Chakraborty. Being examined by the ITO he stated that he did not remember the names of any of the winning horses or the fees charged for entering the race course. Being asked to produce the said K. N. Chakraborty and the latter's books the assessee sought to retract his earlier statements and by his letter dated 1 8th September, 1970, stated that he had placed his bets through his friend, one S.R. Paul.

(3.) Pursuant to a summons issued under Section 131 of the I.T. Act, 1961, K.N. Chakraborty appeared before the ITO and deposed. He admitted the said transactions with the assessee but could not produce his books of account in support and stated that they had been lost by theft. He also admitted that his licence as a book-maker had not been renewed by the Royal Calcutta Turf Club in March, 1969, as he was a tax defaulter. The ITO obtained further statements from the assessee to the effect that he had never bet on horses except during the said period. The ITO also examined S. R. Paul who stated that he had collected, cheques from K. N. Chakraborty on occasions and had placed bets for the assessee with K. N. Chakraborty at the race course.