Legal burden of proof on source of assets shifted to legal heir; failure to prove source results in revenue costs.

The court clarified that the burden of proving the source of acquisition of assets is the same for the assessee and the deceased, depending on the circumstances. In this case, the legal heir, Gopaldas, was deemed better positioned to prove the source of assets acquired by his father. However, the court agreed with the Tribunal's decision that Gopaldas had not adequately proven the source of acquisition of the assets, leading to the assessee being directed to pay the revenue costs.

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Issues Involved:
1. Burden of proving the sources of acquisition of assets by the deceased.
2. Whether the assessee has discharged the burden of proof regarding the source of acquisition of the assets.

Detailed Analysis:

1. Burden of Proving the Sources of Acquisition of Assets by the Deceased:

The court addressed the issue of whether the burden of proving the sources of acquisition of assets by the deceased, Tulsiram Devidayal, was the same as in the case of acquisition by the assessee himself, Lala Gopaldas T. Agarwal. The court clarified that there is no general proposition of law applicable to all cases irrespective of the facts and circumstances. The burden is always on the assessee to indicate the source of acquisition of a particular asset when asked by the taxing authorities or the Tribunal. This burden does not differ between the assessee and the legal heir.

In this case, Gopaldas, as the legal heir, was in a better position to give an explanation about the acquisition of assets by his father, Tulsiram, than Tulsiram himself would have been able to do. The court noted that Tulsiram's will mentioned that due to his old age and incapacity to walk, his son Gopaldas served him and kept him in his own premises. Given that Gopaldas was born in 1907, it was probable that he was in charge of Tulsiram's affairs from 1948 to 1957. Therefore, Gopaldas was better equipped to discharge the burden of proving the source of acquisition.

2. Whether the Assessee has Discharged the Burden of Proof:

The court examined whether Gopaldas had discharged the burden of proof regarding the source of acquisition of the assets. The Tribunal had confirmed the order of the Appellate Assistant Commissioner, which included the amount of Rs. 1,50,000 in the total income of Tulsiram. The Tribunal found that the assessee failed to trace the jewellery shown as on March 31, 1957, to the jewellery held on March 31, 1948. The Tribunal pointed out that the explanation provided by the assessee was based on bits of evidence, each leaving room for drawing inferences either way.

The Tribunal noted that there was no single big withdrawal that could reasonably be said to be available for the purchase of jewellery. The plea about considerable income of Tulsiram and his wife suffered from various infirmities, including the lack of accounting for taxes and other expenditures met from those incomes. The Tribunal also took notice of the plea about the sale of jewellery for meeting tax liabilities, which was irreconcilable with the claim that there were considerable funds available for the purchase of jewellery.

The Tribunal concluded that the assessee failed to establish the source of funds with which the jewellery was acquired and that the income-tax authorities were justified in treating the amount of Rs. 1,50,000 as the assessee's income from undisclosed sources. The court agreed with the Tribunal's finding that the burden had not been discharged by Gopaldas as regards the source of acquisition.

Conclusion:

The court answered the question referred to it by stating that the burden of proving the source of acquisition is the same upon the assessee as upon the deceased, depending on the facts of each case. In this particular case, Gopaldas, the legal heir, was better equipped to discharge this burden. The court accepted the Tribunal's finding that Gopaldas had not discharged the burden of proof regarding the source of acquisition of the assets. Consequently, the assessee was ordered to pay the costs of the revenue.

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