Case: Ladhu Ram Taparia Vs. Commissioner of Income Tax (Central), Calcutta

High Court was right in declining to call for a statement of the case from the Tribunal on the first three questions. It is manifest that question No. 2 does not raise any question of law and question No. 1 was not raised before the Tribunal. Again, because a partnership is registered under the Partnership Act, the income-tax authorities are not obliged to register it under section 26A. The concession made by counsel for the appellants was, therefore, properly made. It was urged that statements of accounts prepared by the appellants and submitted to the Tribunal were not taken on the record and were not considered. But these statements, it is admitted were prepared from the books of account produced before the income-tax authorities. These statements might have facilitated the work of the Tribunal, but if the Tribunal did not think it necessary to look into those statements and they were willing to look into the original record, it cannot be said that in refusing to admit the statements on the record of the appeals, any error of law was committed. It was also urged that the Tribunal did not consider the arguments advanced at the bar as to the quantum of the taxable income of the appellants on the footing that the income of firms I to IV were liable to be amalgamated for the purpose of assessment and therefore the High Court should have called for a statement of case on questions 4 and 5. Counsel submitted that detailed arguments were advanced before the Tribunal on diverse items having bearing on the quantum of assessable income, but the Tribunal only dealt with one item, viz., the unexplained cash credits of Rs. 36, 776 in the account of firm No. II, and did not consider the remaining items. We are unable to accept this argument. The Tribunal in paragraph 13 of its order, after referring to the unexplained cash credit of Rs. 36, 776 and directing that they be deleted from the total assessable income, observed" There is no ground to interfere in any other respect "5. In their order refusing to state a case, in paragraph 7, the Tribunal observed that counsel for the appellants " had said nothing about the reasons given by the Income-tax Officer and the Appellate Assistant Commissioner for rejecting the accounts." They also observed"It was clear that profits had in all these firms to be estimated under the proviso to section 13. About the estimates of profit, the main argument of the assessees counsel was that as there had been purchases and sales by firms Nos. I, II and III inter se, that fact should be taken into consideration in estimating profits. The Tribunal took into consideration all the submissions of the assessee but came to the conclusion that no case had been made out for the Tribunals interference with the estimates of profit in the various concerns. In our opinion, the decision of the Tribunal on this point is concluded by findings of fact which are based on ample material on the record and no question of law arises out of this part of the order."6. Our attention was invited to an item of Rs. 2, 39, 796, which was added back in assessing the taxable income. Counsel for the. appellants contended that in respect of this item, the Tribunal should have given a considered finding. We do not think that failure by the Tribunal to deal with this item expressly justifies interference by this court. The Income-tax Officer found that " Jagadishprosad & Co., Jagmohan Jayantilal, Jewanbhai Jewandas, Ramgopal Agarwala and Rupnarain Gaggar " were merely benami concerns of Ladhuram and his brother, Ganpatrai. He observed that the genuineness of the accounts had not been established although the appellants were given an opportunity to do so. The appellants in their written statement dated January 4, 1950, merely averred that the nature of the credits will be apparent from the " narrations " in the book of account " which will speak for itself. " He further observed" The explanation given is not at all convincing and absolutely no evidence has been produced to substantiate the nature and source of the credits appearing in accounts Nos. (1) to (5) above as well as the genuineness of those parties. In view of what has been fully discussed before it appears to me quite clear that the credits in those accounts represented nothing but assessees undisclosed income."7. The Appellate Assistant Commissioner observed that the appellants had not been able to establish by " any fresh evidence " that the evidence on which the Income-tax Officer based his finding was wrong or that there was anything to show that the concerns referred to in the Income-tax Officers order were not benami concerns of the appellants. The Tribunal, it is true, did not expressly refer to the five accounts, but observed that the fact the appellants " put themselves to such shifts and devices to bolster up a false story showed that they were uneasy under the knowledge that the ostensible firms were anything but real. " They also observed in paragraph 13 of their order that there was no ground to interfere in any other respect (i.e., except the amount of Rs. 36, 776) with the order of the Appellate Assistant Commissioner8. In paragraph 7 of the Appellate Tribunals order under section 66(1), they also made the observations already set out. In this state of the record, we do not think that there is any substance in the plea that the Tribunal had not considered the question whether the amount of Rs. 2, 39, 796 was properly added to the income of the appellants as undisclosed profits9. In our view, the High Court was right in holding that no question of law arose out of the order of the Tribunal. We are also of the view that no case is made out justifying interference in the appeals filed directly against the orders of the Tribunal

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

Explanation:
0[ds]We are unable to accept thisWe do not think that failure by the Tribunal to deal with this item expressly justifies interference by this court. TheOfficer found that " Jagadishprosad & Co., Jagmohan Jayantilal, Jewanbhai Jewandas, Ramgopal Agarwala and Rupnarain Gaggar " were merely benami concerns of Ladhuram and his brother, Ganpatrai. He observed that the genuineness of the accounts had not been established although the appellants were given an opportunity to do so. The appellants in their written statement dated January 4, 1950, merely averred that the nature of the credits will be apparent from the " narrations " in the book of account " which will speak for itself. " He further observed" The explanation given is not at all convincing and absolutely no evidence has been produced to substantiate the nature and source of the credits appearing in accounts Nos. (1) to (5) above as well as the genuineness of those parties. In view of what has been fully discussed before it appears to me quite clear that the credits in those accounts represented nothing but assessees undisclosed income."7. The Appellate Assistant Commissioner observed that the appellants had not been able to establish by " any fresh evidence " that the evidence on which theOfficer based his finding was wrong or that there was anything to show that the concerns referred to in theOfficers order were not benami concerns of the appellants. The Tribunal, it is true, did not expressly refer to the five accounts, but observed that the fact the appellants " put themselves to such shifts and devices to bolster up a false story showed that they were uneasy under the knowledge that the ostensible firms were anything but real. " They also observed in paragraph 13 of their order that there was no ground to interfere in any other respect (i.e., except the amount of Rs. 36, 776) with the order of the Appellate Assistant Commissioner8. In paragraph 7 of the Appellate Tribunals order under section 66(1), they also made the observations already set out. In this state of the record, we do not think that there is any substance in the plea that the Tribunal had not considered the question whether the amount of Rs. 2, 39, 796 was properly added to the income of the appellants as undisclosed profits9. In our view, the High Court was right in holding that no question of law arose out of the order of the Tribunal. We are also of the view that no case is made out justifying interference in the appeals filed directly against the orders of the Tribunal