Case: Sovachand Baid Vs. Commissioner of Income Tax

The Tribunal gave several reasons for it. It said that the appellant had not produced the books of account kept by the father in his own business in Calcutta which was carried on from 1906 to 1926. It held that these books would have shown what moneys the father had with him when he retired from business and went to live in Ratangarh. Then the Tribunal observed that the Ratangarh books contained no entries showing any amount having been received from the Calcutta business when it was closed, as would have appeared if the Ratangarh books were genuine. The Tribunal also noticed that the Ratangarh books only contained a record of moneys sent to the bank and withdrawn there from and of the transactions of certain accommodation loans granted to the son-in-law and other near relations. It observed that the numbers of the ten thousand rupees notes appeared in the entries relating to the accommodation loans granted to the near relations. In these circumstances the Tribunal felt that the books were of such a nature that they could be written up any time that the appellant wanted to. The Tribunal lastly held that the books did not contain a complete record of all the dealings of Mohanlal during the long period from 1926 to 1942.10. The learned counsel for the appellant as not been able to show that the Tribunals remarks on the Ratangarh books of account were wrong on the facts. He directed his attention largely in establishing that the reasons given by the Appellate Assistant Commissioner for accepting the Ratangarh books as genuine, were correct and preferable. That clearly is a matter into which we cannot go for we cannot appraise the evidence afresh. We are unable to say that the reasons given by the Tribunal for the view that the books are not genuine are unfounded or that there was no evidence to support the view that the Tribunal took. In our view, it is possible to find that the Ratangarh books were not genuine for the reasons mentioned by the Tribunal. We do not propose to consider what view we would have arrived at on the materials available as to the genuineness of the books, for that would be entirely irrelevant. It is enough to say that the view taken by the Tribunal is a reasonably possible view on the evidence adduced and that it cannot be said that that view is not supported by the evidence or was unreasonable.11. This would be enough to dispose of the appeal, but there are two other matters to which we should refer.12. Having come to the conclusion that the books of account of Ratangarh could not be accepted, the Tribunal went on to observe that from 1926 to 1945 the only source of income of the appellant and his father was interest earned on moneys deposited in bank. It came to that conclusion apparently because the books of account produced did not disclose any other source of income. The Tribunal also found that about 1945 the appellant had in his bank a sum of about Rs. 8 lacs to Rs. 10 lacs and that being so, in view of the only source of income mentioned earlier, it was impossible to believe that he had another seven lacs of rupees in notes in December, 1945 as alleged by him. The Tribunal then held that in these circumstances, the appellants uninvested cash was likely to be between Rs. 1,50,000 and Rs. 2,00,000 out of which a sum of Rs. 1,40,000 at the most could have been in high denomination notes. In this view of the matter the Tribunal held that out of the high denomination notes of the total value of Rs. 2,68,000 encashed by the appellant in January, 1946, notes worth Rs. 1,40, 000 could have been his capital assets and the balance of Rs. 1,28,000 must have been his undisclosed income. The Tribunal therefore directed that the appellant must pay-tax on the sum of Rs. 1, 28,000. The learned counsel for the appellant criticised this part of the Tribunals judgment as based on mere speculation. We cannot help feeling that this criticism may be partly justified but we do not appreciate how it assists the appellant. It does not, in our view, in any way affect the Tribunals finding on the question as to whether the appellant had proved that the notes had devolved on him on his fathers death. The Tribunal in this part of the judgment was really making a concession to the appellant and gave a benefit to him to which he was strictly not entitled in view of the Tribunals findings on the evidence led by the appellant. We are unable to hold that the Tribunals judgment is liable to be set aside because it held that the whole of Rs. 2, 68,000 was not taxable.13. Lastly, the learned counsel argued that even assuming that the notes formed part of his income, the appellant could not be taxed in respect of them without a finding that they represented income which had arisen or accrued in British India as he had been assessed as a person not residing in British India and that finding had not been made. We are unable to allow this contention to be raised, for it had never been mentioned at any earlier stage of the proceedings. The learned counsel drew our attention to a portion of the judgment of the Appellate Assistant Commissioner to show that the point had been raised earlier. We do not agree that there is anything in the judgment of the Appellate Assistant Commissioner to show that the point had been taken earlier. The portion referred to dealt with the remittances to British India of interest earned in Bikanere and not with the notes with which we are concerned. As the question had clearly never been raised by the appellant at any earlier stage we would not be justified in allowing him to .raise it now.

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

Explanation:
0[ds]The learned counsel for the appellant as not been able to show that the Tribunals remarks on the Ratangarh books of account were wrong on the facts. He directed his attention largely in establishing that the reasons given by the Appellate Assistant Commissioner for accepting the Ratangarh books as genuine, were correct and preferable.That clearly is a matter into which we cannot go for we cannot appraise the evidence afresh. We are unable to say that the reasons given by the Tribunal for the view that the books are not genuine are unfounded or that there was no evidence to support the view that the Tribunal took. In our view, it is possible to find that the Ratangarh books were not genuine for the reasons mentioned by the Tribunal. We do not propose to consider what view we would have arrived at on the materials available as to the genuineness of the books, for that would be entirely irrelevant. It is enough to say that the view taken by the Tribunal is a reasonably possible view on the evidence adduced and that it cannot be said that that view is not supported by the evidence or was unreasonable.g come to the conclusion that the books of account of Ratangarh could not be accepted, the Tribunal went on to observe that from 1926 to 1945 the only source of income of the appellant and his father was interest earned on moneys deposited in bank. It came to that conclusion apparently because the books of account produced did not disclose any other source of income. The Tribunal also found that about 1945 the appellant had in his bank a sum of about Rs. 8 lacs to Rs. 10 lacs and that being so, in view of the only source of income mentioned earlier, it was impossible to believe that he had another seven lacs of rupees in notes in December, 1945 as alleged by him. The Tribunal then held that in these circumstances, the appellants uninvested cash was likely to be between Rs. 1,50,000 and Rs. 2,00,000 out of which a sum of Rs. 1,40,000 at the most could have been in high denomination notes. In this view of the matter the Tribunal held that out of the high denomination notes of the total value of Rs. 2,68,000 encashed by the appellant in January, 1946, notes worth Rs. 1,40, 000 could have been his capital assets and the balance of Rs. 1,28,000 must have been his undisclosed income. The Tribunal therefore directed that the appellant muston the sum of Rs. 1, 28,000. The learned counsel for the appellant criticised this part of the Tribunals judgment as based on mere speculation.We cannot help feeling that this criticism may be partly justified but we do not appreciate how it assists the appellant. It does not, in our view, in any way affect the Tribunals finding on the question as to whether the appellant had proved that the notes had devolved on him on his fathers death. The Tribunal in this part of the judgment was really making a concession to the appellant and gave a benefit to him to which he was strictly not entitled in view of the Tribunals findings on the evidence led by the appellant. We are unable to hold that the Tribunals judgment is liable to be set aside because it held that the whole of Rs. 2, 68,000 was not taxable.13.Lastly, the learned counsel argued that even assuming that the notes formed part of his income, the appellant could not be taxed in respect of them without a finding that they represented income which had arisen or accrued in British India as he had been assessed as a person not residing in British India and that finding had not been made.We are unable to allow this contention to be raised, for it had never been mentioned at any earlier stage of the proceedings. The learned counsel drew our attention to a portion of the judgment of the Appellate Assistant Commissioner to show that the point had been raised earlier. We do not agree that there is anything in the judgment of the Appellate Assistant Commissioner to show that the point had been taken earlier. The portion referred to dealt with the remittances to British India of interest earned in Bikanere and not with the notes with which we are concerned. As the question had clearly never been raised by the appellant at any earlier stage we would not be justified in allowing him to .raise it now.