Case: Lakshmichand Baijnath Vs. Commissioner of Income Tax, West Bengal

is concealed profits was reached by the Income-tax Officer and by the Appellate Assistant Commissioner by ignoring the very material evidence furnished by the proceedings book and that the Appellate Tribunal had erroneously refuse to receive the book in evidence. This contention raises two controversies : (i) Was the proceedings book which was produced before the Tribunal the book which was produced before the Income-tax Officer ? (ii) If it was were the minutes of the meeting prior to 21st April 1945, relied on by the appellant before the Income-tax Officer ? Whatever view one might be inclined to take on the former question, so far as the latter is concerned, it is perfectly plain that they were not. On 27th May 1947, the enquiry was held on both the petition under S. 15A and on the quantum of income assessable to tax under S. 23(3). Exhibit D is an extract from the order sheet of the Income-tax Officer - and it runs as follows :"Regarding credits amounting to Rs. 2,30,346-6-3 in the a/c. Udoyaram Bhaniram the representatives state that besides the evidence produced, which are noted below, they are not in a position to produce any further evidence.(i) Account books of the assessee containing the details of the amounts aggregating the aforesaid sum.(ii) Sale statements rendered by Chunilal Damani, copies at which have been filed.(iii) Broker of Chundal Damani containing entries for purchase of gold, sold by the assessee family along with Surajrattan Bagri the accountant of Chunilal Damani.(iv) Statement of Lakhmichand Bhiwaniwalia and Pannalal Bhiwaniwalla, member of the assessee family."This statement is signed by the counsel for the appellant. It is clear from the above that the proceedings book was not relied on as evidence on the character of the receipts making up the sum of Rs. 2,30,346. The fact appears to be that the appellant produced the proceedings book in support of his petition under S. 25A for the purpose of establishing that there was a completed partition, and relied only on the minutes of the meeting held on April 21, 1945, in proof thereof, and that is why that alone was translated in English and marked as Ex. B. It is also to be noted that there is no reference in the order of assessment by the Income-tax Officer under S. 23(3) to the minutes of the meetings prior to April 21, 1945, and that they were not even translated, as was the record of the meeting dated April 21, 1945. The obvious inference is that they were not relied on by the appellant, and were therefore not considered by the Officer. It is also significant that the order of the income-tax Officers refers to sale of ornaments broken or unbroken. The story that the gold which was separated from the jewels after removing the pearls and stones was melted and sold in quantities of 250 or 500 tolas, which was the argument pressed before us, was not put forward before him.9. It is argued that in the appeal against the order of the Income-tax Officer the ground was definitely taken that the proceedings book had been produced before him, and that it was also prominently mentioned in a petition supported by affidavit filed by the appellant. But the order of the Appellate Assistant Commissioner does not deal with this matter either, and it is inconceivable that he would have failed to consider it if it had been pressed before him. It is also to be noted that the appellant who had obtained a return of the proceedings book from the Income-tax Officer did not file it before the Appellate Assistant Commissioner, nor did he move for its admission in evidence. Apart from taking the grounds to which we were referred, the appellant appears in have presented his case before the Appellate Assistant Commissioner precisely on the same lines on which he pressed it before the Income-tax Officer. In view of these facts, we are unable to hold that in refusing to admit the proceedings book as evidence in the appeal, the Appellate Tribunal acted perversely or unreasonably. Indeed, counsel for the appellant did not contend, in the High Court that the Tribunal had acted illegally or unreasonably in refusing to admit the proceedings book in evidence. That being so, it cannot be said that the finding given by the Tribunal on an appreciation of the facts and circumstances already set out is unsupported by evidence or is perverse.10. The position may thus be summed up : In the business accounts of the appellant we find certain sums credited. The explanation given by the appellant as to how the amounts came to be received is rejected by all the Income-tax authorities as untenable. The credits are accordingly treated as business receipts which are chargeable to tax.In V. Govindarajulu Mudaliar v. Commissioner of Income-tax, Hyderabad, Civil Appeals Nos. 41 to 43 of 1957 D/- 24-9-1958 : (AIR 1959 S C 248) this Court observed :"There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature.That is precisely what the Income-tax authorities have done in the present case, and we do not find any grounds for holding that their finding is open to attack as erroneous in law.11. (3) Lastly, the question was sought to be raised that even if the credits aggregating to Rs. 2,30,346 are held to be concealed income, no levy of excess profits tax can be made on them without a further finding that they represented business income, and that there is no such finding. When an amount is credited in business books, it is not an unreasonable inference to draw that it is a receipt from business. It is unnecessary to pursue this matter further, as this is not one of the questions referred under S. 66 (2).

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. The position may thus be summed up : In the business accounts of the appellant we find certain sums credited. The explanation given by the appellant as to how the amounts came to be received is rejected by all theauthorities as untenable. The credits are accordingly treated as business receipts which are chargeable to tax.In V. Govindarajulu Mudaliar v. Commissioner ofHyderabad, Civil Appeals Nos. 41 to 43 of 1957 D/: (AIR 1959 S C 248) this Court observedis ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, theOfficer is entitled to draw the inference that the receipts are of an assessableis precisely what theauthorities have done in the present case, and we do not find any grounds for holding that their finding is open to attack as erroneous in law.11. (3) Lastly, the question was sought to be raised that even if the credits aggregating to Rs. 2,30,346 are held to be concealed income, no levy of excess profits tax can be made on them without a further finding that they represented business income, and that there is no such finding. When an amount is credited in business books, it is not an unreasonable inference to draw that it is a receipt from business. It is unnecessary to pursue this matter further, as this is not one of the questions referred under S. 66 (2).