COMMISSIONER OF INCOME-TAX Vs. LACHHMAN DASS OSWAL

JUDGEMENT

(1.) THE following question has been referred to this court at the instance of the revenue by the Income-tax Appellate Tribunal, Chandigarh: "whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in deleting the addition of Rs. 26,386 made by the Income-tax Officer and sustained by the Appellate Assistant Commissioner of Income-tax ?"

(2.) THE total income of the assessee, who is an individual, relating to the assessment year 1957-58, was initially assessed at Rs. 2,37,899 by the ITO, vide order dated April 29, 1960. Later on, a notice under Section 148 of the I. T. Act was served on the assessee on March 30, 1966, calling upon him to furnish a return of his total income. In the return filed in response thereto, the total income shown was as already assessed. In the reassessment completed by the ITO on February 25, 1969, two additions of the amounts of Rs. 1,968 and Rs. 26,386 were added from speculation business and as income from undisclosed sources, respectively. The order of the assessing authority was confirmed, on appeal, by the AAC.

(3.) IN the appeal before the Tribunal, the assessee gave up his challenge to the addition of the amount of Rs. 1,968 relating to the speculation business. The addition of the remaining amount was challenged on the ground that the explanation of the assessee as to its source had been erroneously rejected by the assessing authority. The Tribunal, however, refused to go into the adequacy of the assessee's explanation as to the source of the said amount and ordered its deletion on the ground that there was no presumption in law that the cash appearing in the hands of the assessee during a particular accounting year or the investment made during a particular year reflects by any fiction, the assessee's income of that particular accounting year. The view taken by the Tribunal appears to have been based on a decision of the Madras High Court in Vishnukantham Chetty v. CIT [1958] 34 ITR 678, wherein it was held that where there is no evidence to support the finding that the amount was income which accrued to the assessee in the relevant accounting period, it could not be assessed to tax. With due respect to the learned judges, we are, however, unable to subscribe to this view and the matter has since been authoritatively settled by the Supreme Court in Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1, wherein it was held (p. 4): ". . . that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income-tax Officer is entitled to treat it as taxable income. "