1953 (3) TMI 43

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....ent year 1947-48, Rai Bahadur S.N. Ganguli returned an income of Rs. 24,815. The Income-tax Officer did not reject the account books produced by the assessee, but he added a sum of Rs. 15,000 which was the amount of high denomination notes encashed by the assessee on the 19th of January, 1946, through the Ranchi branch of the Bengal Central Bank Ltd. The amount encashed was not mentioned in the books of account produced by the assessee. The Income-tax Officer called upon the assessee to explain the source of the high denomination notes. Not being satisfied with the explanation, the Income-tax Officer treated the amount of Rs. 15,000 as secreted profit of the assessee. The assessee appealed to the Appellate Assistant Commissioner; but the ap....

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....place, it has been found that the amount encashed finds no place in the books of account produced by the assessee. It has been rightly pointed out by Mr. S.N. Dutt, who ably argued the case on behalf of the assessee, that the authorities have not disbelieved the books of account which the assessee produced. That circumstance, however, has no bearing on the question whether the amount of Rs. 4,000, which the assessee, admittedly encashed on the 19th of January, 1946, was secreted income. The principle to be applied in a case of this description is well settled. When the assessee fails to prove positively the source and nature of a certain amount which he received in the accounting year, the revenue authorities are entitled to draw an inferen....

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....#39;s name. As regards this amount of Rs. 4,000, therefore, the question formulated by the Income-tax Tribunal must be answered against the assessee and in favour of the Income-tax Department. But the position is different with respect to the amount of Rs. 11,000 which was the amount of high denomination notes encashed in the name of the assessee's wife, Hemprabha Ganguli. As regards this amount, the Income-tax Appellate Tribunal has observed that an affidavit has been filed by the assessee's wife, Hemprabha Ganguli, claiming that the notes encashed by her were her own property, and that her independent source of income was a house in Ranchi, and further that she had received from time to time cash gifts from her relations on var....

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....e no justification on the part of the Income-tax authorities to tax this amount. The principle to be applied is a different principle, namely, that, in the absence of evidence to the contrary, the money standing in the name of the wife must be presumed to belong to her, and an assessee cannot be taxed in respect of the amount standing in the name of the wife. The onus of proof in such a case will be not on the assessee but on the Income-tax Department to show by at least some material that the amount standing in the name of the wife does not belong to the wife but belongs to the assessee. In this connection, the Appellate Tribunal has said that the close relationship of husband and wife would be a circumstance to indicate that the amount of....