DHANSIRAM AGARWALLA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN compliance with this Court's order dt. 31st Jan., 1989, passed in Civil Rule No. 29/M of 1981, directing the Tribunal to draw up and submit a statement of the case, the Tribunal has accordingly submitted the same and referred the following question of law for this Court's opinion :

(2.) THE assessee, following the mercantile system of accounting, was assessed in the status of an individual for the asst. year 1973 -74. The assessment was completed under S. 143(3) on 31st March, 1976. It was found by the ITO that the assessee had deposited Rs. 1,58,400 with the Bank of India, Netaji Subhash Road Branch, Calcutta, on 5th April, 1972, at Calcutta, through the assessee's son, Dayaram. The ITO observed that unless the person concerned had travelled by air to Calcutta, it was otherwise not possible to reach Calcutta on the 5th, the date of deposit. The ITO then enquired about the mode of journey. The assessee, by his reply dt. 16th Feb., 1976, informed that as far as he could remember, Dayaram Agarwal travelled by air to Calcutta on 4th April, 1972. The same was confirmed by Dayaram Agarwal as well vide his letter dt. 20th Feb., 1976. Subsequent enquiries with the Indian Airlines, revealed that it was not there but in the meantime, the assessee by his letter dt. 5th March, 1976, informed the ITO that Dayaram travelled by car, but the ITO did not accept this story. Considering the distance between Tinsukia and Calcutta, the ITO noted that it was improbable for any carrier to reach Calcutta within banking hours, on the 5th had he started from Tinsukia on the 4th by car. It was also found that on 4th April, 1972, the assessee had no sufficient opening cash balance. So he had to borrow from other firms on that day and in such a circumstance the person carrying the money could start late in the morning and under the circumstances Dayaram could not have reached Calcutta on the 5th by forenoon. Therefore, this amount of Rs. 90,000 was treated as the assessee's income from undisclosed sources.

(3.) THE Revenue came in appeal before the Tribunal, and the Tribunal reversed the AAC's order and restored that of the ITO.