COMMISSIONER OF INCOME TAX Vs. HASINA BEGUM WIFE

JUDGEMENT

(1.) For the assessment year 1970-71, the Tribunal has referred the following questions of law under Section 256(1) of the Income-tax Act, 1961 : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal had evidence to hold that the sum of Rs. 1,40,000 invested by the assessee in the construction of house property at 19/1, Balu Hakak Lane, Calcutta, was advanced by way of a loan to his wife ?

(2.) If the answer to question No. one is in the negative, then on a correct interpretation of the provisions of Section 64(iii) of the Income-tax Act, 1961, the Tribunal was justified in holding that the income from property at 19/1, Balu Hakak Lane, was not assessable in the hands of the assessee ?" 2. The facts of this case are stated hereafter. The assessee, since deceased, was a medical practitioner and was attached to Islamia Hospital. He was also employed in Serajuddin & Co. In the proceedings for assessment to tax for the assessment year 1970-71, the Income-tax Officer included the income from a house property standing in the name of the assessee's with Smt. Hasena Begum, at No. 19/3, Balu Hakak Lane, in the total income of the assessee. The two plots of land were acquired at a cost of Rs. 28,000 and Rs. 14.000 in 1956-57, and thus the total cost of land was Rs. 42,000. Smt. Hasina Begum filed a disclosure petition under Section 271(4A) of the Income-tax Act, 1961, stating that she earned the income of Rs. 1,50,000 in the course of several years out of the agricultural properties but offered the same for assessment to income-tax in the absence of conclusive evidence acceptable to the Income-tax Department. Smt. Hasina Begum is a daughter of late Samsul Huda who died in 1920 leaving about 90 bighas of land in the district of Hooghly, containing extensive agricultural land, ponds, etc. Late Samsul Huda had only one son and one daughter. The son died in 1953 and the whole of 90 bighas of agricultural land had devolved upon the assessee's wife who filed details of income earned from the agricultural lands. Besides, she also stated that the construction of the house property was made out of the income earned by her to the extent of Rs. 54,218 of which Rs. 1,127 was earned in 1959, Rs. 8,945 was earned in 1960, Rs. 9,645 was earned in 1961, Rs. 13,501 was earned in 1962 and Rs. 21,000 was earned in 1963. The disclosure petition of the wife was rejected by the Commissioner of Income-tax and the assessee, it has been stated, had to make a disclosure petition stating that the said income was earned by him. In the disclosure petition, the assessee stated that the amount of Rs. 1,40,000 would be assessed in the hands of the assessee. Before the Income-tax Officer, the assessee stated that he advanced a loan of Rs. 1,40,000 to his wife for the construction of the house property but, according to the Income-tax Officer, this was an afterthought. Before the Income-tax Officer, the assessee produced one bound cash book containing 92 pages in which the opening capital was showed at Rs. 16,505. As the opening capital could not be explained, the Income-tax Officer took the view that the cash book was written up with some specific purpose and none else than to support the contention that the loan was given by the assessee to his wife. He thus included the income from house property in the total income of the assessee. When the assessee went in appeal before the Appellate Assistant Commissioner, he excluded this from the total income of the assessee having regard to the earlier decision in Appeals Nos. 601 and 602/III(I)/71-72. The Appellate Assistant Commissioner in his earlier order considered the following evidence to show that the property belonged to his wife :

(3.) The Appellate Assistant Commissioner also noticed from the note book maintained by the wife that several amounts were paid back to the assesses by his wife by way of return of loan given by him.