TaxTMI 
TaxTMI 
1982 (7) TMI 24
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....thereof was the income of the applicant assessable under section 69 of the Income-tax Act, 1961, on the ground that the applicant had not explained the source of its acquisition ? (2) Whether the finding that the sum of Rs. 1,06,066 (Rupees one lakh six thousand and sixty-six) represented income of the applicant is based on suspicion, surmises and/or improper consideration of the evidence on record and is, therefore, unjustified in law ? " The facts giving rise to this reference are as follows : The assessee is a Hindu undivided family (HUF) and one Kacharulal Tejmal, after whom the HUF is named, was the karta of the HUF. The assessment year with which we are concerned is the assessment year 1962-63 and the relevant previous year w....
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....----------------------------------------- State Bank of India 117 fully pressed cotton bales 44,460 Punjab National Bank 51 fully pressed cotton bales 21,685 51 loose cotton bales 21,420 &nbs....
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....n 8th November, 1961, there were 268 fully pressed cotton bales pledged by the assessee in its said accounts, and the total value thereof was Rs. 1,45,465. According to the assessee, these goods pledged with the banks did not belong to the assessee but to Ramanlal & Company. However, according to the books of account of Ramanlal & Company, the stocks of that firm as on 8th November, 1961, were as below : ------------------------------------------------------------------ Bales Bojas Raw Cotton &n....
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....s stocks, although it had 838 Qts. of raw cotton. This discrepancy was pointed out to the assessee, namely, as to how 268 bales of cotton belonging to Ramanlal & Company could have been pledged by the assessee with the said banks when that firm had only 48 such bales in its stock. The stand of the assessee, firstly, was that the banks had given the loans against the pledge of raw cotton, which was in the process of conversion into bales. Secondly, it was urged that though certain bales were not actually available with Ramanlal & Company on 8th November, 1961, the goods were being transported from elsewhere to Khamgaon and the bank there had advanced loans on the strength of such information. Although called upon, the assessee failed to prod....
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....tments with which we are not concerned here. It is from this decision of the Tribunal that the aforesaid two questions have been referred to us. The first submission of Mr. Munim, learned counsel for the assessee, was that, on the evidence, there was no nexus shown between the assessee and the pledged goods. In our opinion, this argument has only to be stated to be rejected. The said goods were pledged by the assessee in its overdraft accounts, which would clearly indicate that they were pledged on the footing that they belonged to the assessee. In these circumstances, one fails to see how it could ever be said that there was no nexus between the assessee and the said goods. It is possible that the assessee could have given an explanatio....