1954 (3) TMI 74 - HC - Income Tax

Assessee's Burden of Proof Upheld in Income Tax Case for Undisclosed Sources

Bachhraj Amolakchand Versus Commissioner of Income-Tax, Madhya Pradesh And Bhopal, Nagpur

Bachhraj Amolakchand Versus Commissioner of Income-Tax, Madhya Pradesh And Bhopal, Nagpur - [1956] 29 ITR 1009 Issues:1. Dispute over credits in the assessee's account-books for the assessment year 1947-48.2. Rejection of assessee's explanation regarding the sale price of family ornaments.3. Burden of proof on the assessee in income tax proceedings.4. Rejection of accounts and the duty of the assessee to prove his case.5. Requirement for the assessee to disclose the source of receipts in account books.6. Inference of revenue income by Income-tax authorities in the absence of proof.7. Analogy to previous cases indicating undisclosed sources of income.8. Dismissal of the application with costs.Analysis:1. The case involves a dispute concerning credits in the assessee's account-books for the assessment year 1947-48. The Income-tax Officer doubted the genuineness of these entries, leading to the rejection of the assessee's explanation regarding the sale price of family ornaments, treating the amounts as income from undisclosed sources.2. The rejection of the assessee's accounts was based on reasons, and the court held that the Income-tax authorities are not burdened to prove the unreliability of accounts positively. The rejection was deemed reasonable and not open to interference, citing precedent cases to support this stance.3. The burden of proof lies with the assessee in income tax proceedings. The Income-tax Officer's decision to not make further inquiries or examine specific witnesses was considered valid as the assessee failed to request the examination of relevant individuals like the goldsmith and the merchant.4. The requirement for the assessee to disclose the source of receipts in account books was emphasized. The court distinguished a previous case where the receipt from an alleged source was not proved, making the current case distinguishable.5. Income-tax authorities are entitled to draw inferences of revenue income in the absence of positive evidence on the source or nature of receipts. Precedent cases were cited to support the authority's right to infer revenue income based on circumstances.6. The court noted an analogy to a previous case indicating the possibility of the assessee possessing undisclosed sources of income, further supporting the inference drawn by the Income-tax Authorities regarding revenue receipts from undisclosed sources.7. Ultimately, the application was dismissed with costs, highlighting the failure of the assessee to substantiate the claims and meet the burden of proof required in income tax proceedings. The counsel's fee was also specified in the judgment.