1966 (10) TMI 23

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....tion 66(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act). The question referred is : "Whether there was material before the Tribunal to hold that whereas 22 high denomination notes out of a total of 28 high denomination notes could form part of the assessee's cash balance, the remaining 6 high denomination notes could not form part of such balance?" The material fac....

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....its business, of Rs. 38,406-8-6 on 11th January, 1946. In other words, the explanation was that these 28 notes had come out of the aforesaid closing cash balance. The Income-tax Officer disbelieved the explanation and treated the entire amount of Rs. 28,000, represented by high denomination notes encashed, as the assessee's income from an undisclosed source. The assessee preferred an appeal to the....

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....eeded to find out how much, out of the daily cash balance with the assessee, could have been in the form of high denomination notes. In such an exercise undertaken by the Tribunal, inevitably, the element of guess and conjecture came in. The Tribunal accepted that 22 notes of the denomination of Rs. 1,000 each could have come out of the cash balance of Rs. 38,000 and odd, but was not satisfied tha....

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....ome-tax also categorised the finding of the Tribunal such as the one in the present case as based on surmises and conjectures. In that case, out of 32 high denomination notes only seven were accepted and the balance of Rs. 25,000 was added, although the cash balance on the 11th of January, 1946 was Rs. 34,313. It was also pointed out that the recording of the numbers of the high denomination notes....