TaxTMI 
TaxTMI 
1958 (3) TMI 58
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.... Chimanlal and Manilal, their shares being equal. Manilal died sometime after May, 1944, i.e., in S.Y. 2000. In the relevant account year S.Y. 2003, the assessee firm was constituted by two equal partners, they being Chimanlal Gokuldas and Rasiklal Manilal, the latter being the only son of Chimanlal's deceased brother, Manilal. Their shares were equal. 4. Up to and including S.Y. 2002, the said firm carried on business at Nadiad only. On October 25, 1946, it opened a branch in Bombay under the name and style of Bombay Metal Works. In the set of account books relating to the Bombay business, the following credits (rounded to the nearest rupee) appeared: Rasiklal Manilal Rs. 7,601 (Partner). Jaswantlal Chimanlal Rs. 2,534 Jayantilal Chimanlal Rs. 2,534 (Sons of the other partner, Chimanlal). Sundarlal Chimanlal Rs. 2,534 Rs. 15,203 The credits made their appearance on October 25, 1946, i.e., the first day of the account year S.Y. 2003. The said amount of Rs. 15,203, was divided equally between the two partners, Rasiklal and Chimanlal, though the amount stood to the credit of the thr....
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.... Kartik S.Y. 2003." A perusal of the will of the deceased Manilal shows that he did not mention the said amount of Rs. 15,203 in his will, though, if Chimanlal's statement is to be believed, it was with him when he made the will and when he died. At one stage, Chimanlal had stated that the money was found in the house of his deceased brother, Manilal, after his second wife, Bai Ramakanta, ran away. Subsequently, he stated that it was the widow, Bai Ramakanta, and the boy, i.e., Rasiklal, who entrusted the amount to him in Kartik S. Y. 2003. According to Chimanlal, his brother had directed him to divide the amount equally between him and his brother's son, Rasiklal, but the money was not in his custody and was in the custody of Rasiklal, then aged 14. No explanation was given as to why the money was not divided immediately after the death of Manilal according to instructions, if they were given. Chimanlal further admitted that there was no evidence whatever to support the story of the sale of the ornaments by Manilal. 5. The said amount was added to the total income of the firm as income from undisclosed sources. That assessment had....
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....me to the conclusion that the assessee has committed an offence as described in section 28(1)(c)." On the material that was on record in regard to the present case, he gave his conclusion in the following words: "Hence my conclusion is that not only the assessee failed to explain the sources satisfactorily to the Income-tax Officer but he gave a false explanation in regard to it. One would not give a false testimony unless one has to hide the real state of affairs. I, therefore, hold that the provisions of section 28(1)(c) are attracted." He was also of the opinion that the quantum of the penalty levied did not call for any interference. 7. As there was a difference of opinion on a point, the members stated the point in the following words and referred the case to the President as required by section 5A(7) of the Act: "Whether on the material on record, the assessee has committed an offence as described in section 28(1)(c)?" The President of the Tribunal himself heard the point and he came to the conclusion that the explanation offered in regard to the source of Rs. 15,203, viz., that it represe....
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....unal to say that the concealment occurred in an earlier year?" The second question is obviously directed against the third member admitting, if at all he has admitted, a fresh ground of appeal at that stage. 10. In our opinion, on the facts set out above, the following question of law arises: "Whether the assessee has committed an offence as described in section 28(1)(c) in regard to its income of the previous year S.Y. 2003 relevant for the assessment year 1948-49?" 11. Both the representatives agree that all the facts have been correctly stated. The departmental representative pressed that the two questions as framed by the Commissioner be referred. In our opinion the question set out in paragraph 8 is wide enough. Mr. Mehta, counsel for the assessee, suggested that copies of the assessment order, of the penalty order passed by the Income-tax Officer and of the explanation given by the assessee to the Income-tax Officer's notice under section 28(3), be annexed to the statement of the case. We do not find it necessary to do so as the statement of the case drawn has sufficiently brought out the issue about "burden of proof" under section 28(1)(c). G. N. Joshi, fo....
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....income of the previous year S.Y. 2003 relevant for the assessment year 1948-49? Now, on the face of it, the question appears to be a question of fact. Whether the assessee has committed an offence or not, it is for the Tribunal to decide, and the majority of the Tribunal having decided that he has not committed an offence, the matter is concluded. We are not a further court of appeal to sit in judgment on the decision of the Tribunal. It is, therefore, possible to dispose of this reference on the narrow ground that no question of law arises from the order of the Tribunal, and the question as framed is a question of fact and not a question of law. But, as the matter is of some importance and has been argued at some length, we will reframe the question so as to bring out the real controversy in regard to law between the Department and the assessee, and the question that we will reframe will be as follows: "Whether there was evidence to justify the finding of the Tribunal that the assessee had not committed an offence as described in section 28(1)(c) in regard to its income of the previous year S.Y. 2003....
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.... and earned this sum of Rs. 15,203 by means of a very fortunate and successful betting. He may wish to conceal that fact and he may have given a false explanation as to how he came by this sum of Rs. 15,203. Therefore, it becomes obvious that when you eliminate the explanation of the assessee, which it is open to the Department to do, something must be left which will lead to the inference that the receipt of Rs. 15,203 constitutes an income. Now, if you wipe off from the slate this evidence, nothing whatever remains, and as we have just said, the very basis of the decision against the assessee is that the explanation he gave was a false one. As a matter of fact, the member of the Tribunal, who took the view in favour of the Department, puts it in this way: "Where, however, the explanation given is so improbable that it amounts to being false then, I believe, the assessee exposes himself to the penalty leviable under section 28(1)(c)." With respect to this member, he seems to overlook the fact, that we have already suggested, that the assessee is not being prosecuted for giving a false explanation. The c....