J A SHELLIM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application by the assessee under s. 66 (2) of the IT Act for an order requiring the Tribunal to state a case and formulate questions for the opinion of this Court. It arises in the following circumstances. The year of account in question is 1940-41. The assessee made a return to the ITO in which he included, as income under other sources (Sec. 12), "speculation Rs. 365-8-0." On being asked to justify that amount, he was totally unable to do so although in the return, the income is set out to an exact anna. The ITO, on an examination, found that he had two banks, the Eastern Bank and the other, Lloyd's Bank. In the Eastern Bank there were two accounts and one at the latter bank. In one of the Eastern Bank accounts and the Lloyd's Bank account there were considerable credits for a period of one year; the total of the two amounted to Rs. 79,972. There also were debits. The assessee was asked the source of the credits and he made an affidavit to the effect that they were results of transactions in gambling on horse races and at the card table. There was no further infermation given. It would seem that the IT authorities believed that he was a heavy gambler but the sources of the several credits, amounting to a large sum of money, were entirely in the assessee's hands and he gave no information and there was no evidence from whom or from where those moneys had been received, nothing beyond his own. Eventually, after appeal by the assessee to the AAC, an assessment was made at Rs. 26,590 upon the above amounts representing about 1/3rd of the credits. THIS assessment was made pursuant to s. 13 of the Act which, in effect, authorises the ITO to estimate the amount of an assessment; of course in doing so he must act in accordance with property. The assessee appealed to the Tribunal which upheld the assessment and dismissed the appeal and upon being asked to state a case, pursuant to five questions put before it by the assessee, the Tribunal refused, expressing the opinion that no question of law arises.

(2.) IN my opinion the Tribunal was perfectly correct. I can see no point of law whatever arising here. Undoubtedly there were considerable proceeds which were credited in the bank accounts of the assessee. He gave no information whatever of the sources of those credits. All information was entirely in his hands and, I would express it, he withheld that information. There being nothing before the ITO, so far as the sources of those receipts were concerned, he was obliged to act under the provisions of s. 13 and in doing so he has allowed 2/3rd of the total amount of the credits towards, what might be called, expenses and made an assessment upon 1/3rd. He was doing the best that he could in the circumstances. If the assessee had not withheld all information but had produced some evidence regarding the accounts and his gambling transactions then perhaps a different assessment might have been made. This was a pure question of fact and there is nothing to show that the ITO in any way acted inconsistently with the provisions of s. 13. That being so, I cannot see that any question of law arises and in my opinion this application should be dismissed.