RAJ MOHAN SAHA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN compliance with the order of this court the following question has been referred to this court by the INcome-tax Appellate Tribunal "A" Bench, Calcutta, for opinio :

(2.) THE assessee, Messrs. Raj Saha and others, is a registered firm with seven partners of whom Sri Raj Mohan Saha has the major share of 0-7-6 pies. THE head office of the firm is at Agartala. THE firm has various purchase centres and one is at 26A, Raja Rajendra Narain Street, Burrabazar, Calcutta. THE assessee deals in seeds, oils, rice, dal and other miscellaneous goods. In the course of the assessment for the year 1954-55 the Income-tax Officer got information that huge sums of money were remitted through postal insurance covers from the assessees gaddi at Agartala to its purchasing centre at Calcutta and that these remittances have not been entered in the account books produced before him. On Shri Raj Mohan Saha, the managing partner of the firm, being asked to explain the reason for such omissions, he denied having made any remittances to the purchasing centre at Calcutta. THE Income-tax Officer found that there were many remittances made by Raj Mohan Saha, the managing partner, himself and several others were made by Sukhan Lal Poddar and Makhan Lal Saha, both of whom were employees at the Agartala gaddi of the assessee. THE payee in every case was Shri Benode Behari Saha, the manager of the purchasing centre of the firm at Burrabazar, Calcutta. THE explanation given by Sri Raj Mohan Saha was not accepted and the Income-tax Officer held that the assessee firm was carrying on certain undisclosed business having a turnover of Rs. 4 lakhs. He estimated an income from such undisclosed business at 5% on the said turnover, thus estimating the income at Rs. 20,000 for each of the two assessment years. This amount was added to the total income of the assessee. THE order of the Income-tax Officer was confirmed by the Appellate Assistant Commissioner in appeal. THE matter was taken to the Tribunal in second appeal and the contention of the assessee that sufficient opportunity had not been given to it by the Income-tax Officer or by the Appellate Assistant Commissioner to produce evidence in support of its explanation in the matter was accepted by the Tribunal and the matter was remanded to the Income-tax Officer for investigation and for consideration of the several points raised by the assessee firm. THE investigation was made by the Income-tax Officer after remand. He examined several witnesses under section 37 of the Indian Income-tax Act. Affidavits sworn by certain persons were also produced before him. THE point taken before the Income-tax Officer after the remand was that the persons, namely, Raj Mohan èSaha, Sukhan Lal Poddar and Makhan Lal Saha, who remitted the money to Shri Benode Bihari Saha, are not the persons connected with the firm of the assessee. THEy were different persons. THE Income-tax Officer did not accept the explanation given by the managing partner and he maintained his earlier order adding Rs. 20,000 to the income of the assessee on the basis that the turnover of the undisclosed business was Rs. 4 lakhs and the assessee had made a profit of five per cent. on the said turnover. THE order of the Income-tax Officer was affirmed by the Tribunal.

(3.) MR. Choudhury, who appears for the department, has contended that no question of law arises out of the Tribunals order. The point was never taken before the Tribunal that there was no material from which it could be determined that the turnover of undisclosed business was Rs. 4 lakhs and that the profit from that turnover was five per cent., that is, Rs. 20,000. The finding of the Income-tax Officer and the Appellate Assistant Commissioner on these two facts was never challenged before the Tribunal and thus it cannot be allowed to be raised before th is court. It is lastly contended that there were materials before the income-tax authorities from which the Income-tax Officer has drawn the conclusion of fact and it cannot be said that there is no material before the income-tax authorities to hold that the sum of Rs. 20,000 represented the undisclosed income of the assessee firm.