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Mathuradas Gokuldas Vs. Commissioner of Income-tax, Bombay City-iii - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 43 of 1964
Judge
Reported in[1976]102ITR425(Bom)
ActsIndian Income-tax Act, 1922 - Sections 66(2); High Denomination Bank Notes (Denometisation) Ordiance, 1946 - Sections 6
AppellantMathuradas Gokuldas
RespondentCommissioner of Income-tax, Bombay City-iii
Appellant AdvocateR.J. Kolah, Adv.
Respondent AdvocateR.J. Joshi, Adv.
Excerpt:
.....or material on record to show that this income from undisclosed sources was assessable for assessment year 1947-48. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post reserved for member of schedule tribe his caste certificate was invalidated subsequently held, his appointment would not be protected. the observations/directions issued by supreme court in para 36 of judgment in the case of state v millind reported in 2001 91) mah. lj sc 1 is not the law declared by..........5. in baladin ram v. commissioner of income-tax, the supreme court has taken the view that it is now well-settled that the only possible way in which income from an undisclosed source can be assessed or reassessed is to make the assessment on the basis that the previous year for such an to make the assessment on the basis that the previous year for such an income would be the ordinary financial year. the ratio of this case is directly applicable and the accounting year in view of the declaration made will be april 1, 1945, to march 31, 1946, and such income from undisclosed sources can only be assessed for the assessment year 1946-47. that being the position it is patent that there is no evidence or material on record to show that this income from undisclosed sources was assessable.....
Judgment:

Kantawala, C.J.

1. At the instance of the assessee three questions of law are referred to us for determination under section 66(2) of the Indian Income-tax Act, 1922. They are :

'(1) Whether there was any evidence or material to support the finding of the Tribunal that the sum of Rs. 1,38,000 represented the appellant's income from undisclosed sources

(2) Whether the conclusion arrived at by the Tribunal that the sum of Rs. 1,38,000 was the appellant's income from undisclosed sources was perverse in the sense that no reasonable man could come to it on the materials on record

(3) Whether the said conclusion was based on conjectures, surmise or suspicion and on a failure to consider the relevant evidence on record ?'

2. As this reference is capable of being disposed of on a short point, namely, whether the sum of Rs. 1,38,000 as income from undisclosed sources can be assessed for the assessment year 1947-48 or not, it is unnecessary for us to go into the facts in detail. For the assessment year 1947-48, the relevant accounting year is the calendar year 1946. The Income-tax Officer, upon scrutiny of the material before him, assessed the assessee to the total amount of Rs. 3,69,371 which included a sum of Rs. 1,38,000 being the amount of certain high denomination notes encashed by her, as income from undisclosed sources. The contention of Mr. Kolah, on behalf of the assessee, is that, so far as the sum of Rs. 1,38,000, being the income from undisclosed sources, is concerned, it cannot be assessed to the assessee for the assessment year 1947-48. His submission was that if at all this sum of Rs. 1,38,000 is income from undisclosed sources, then it accrued to the assessee during the accounting year April 1, 1945, to March 31, 1946, and it can be the assessee only in the assessment year 1946-47. His submission was that, on the facts admittedly on the record, no other view is possible in view of the decision of the Supreme Court on this point. Mr. Joshi, on the other hand, on behalf of the revenue contended that this aspect of the matter was never canvassed before any of the taxing authorities nor has it been raised by way of a specific question in the reference application. His argument is that a specific question ought to have been raised and without doing so it is not permissible to an assessee to urge such a contention.

3. In our opinion, question No. 1 is wide enough to include this aspect of the matter. That question relates to existence of evidence or material to support the finding of the Tribunal that the sum of Rs. 1,38,000 represented the income of the assessee from undisclosed sources for the assessment year 1947-48. If for the assessment year 1947-48, the sum of Rs. 1,38,000 as income from undisclosed sources cannot be regarded as part of the income, then naturally question No. 1 has to be answered in favour of the assessee. On January 19, 1946, the assessee made a declaration in the form prescribed under section 6 of the High Denomination Bank Notes (Denometisation) Ordiance, 1946 being ordinance No. 3 of 1946. As shown by particulars in item 14 of the declaration she has encashed 238 notes of Rs. 1,000 each. While assessing the assessee for the assessment year 1947-48, the Income-tax Officer directly applied his mind to the question whether the sum of Rs. 2,38,000 representing 238 notes of Rs. 1,000 each was her income for the assessment year 1947-48. He clearly took the view that 100 notes of the aggregate amount of Rs. 1,00,000 could be treated as representing her saving from all sources and he held that the remaining amount of Rs. 1,38,000 as income from undisclosed sources is liable to tax in the assessment year 1947-48.

4. The first question which has been raised on behalf of the assessee is wide enough to include the aspect of the matter whether this sum could be assessee for the assessment year 1947-48 and no separate question need be raised in respect thereof. If on a settled point of law the assessee is able to point out that one the basis of the declaration made by her this income of Rs. 1,38,000 as income from undisclosed sources can only be assessed for the assessment year 1946-47 for which the accounting year is April 1, 1946, to March 31, 1947, then she is entitled to succeed in so far as question No. 1 is concerned. For deciding question No. 1 we have to consider whether there is evidence to support the finding of the Tribunal that the whether there is evidence to support the finding of the Tribunal that the sum of Rs. 1,38,000 as income from undisclosed sources is the income liable to tax for the assessment year 1947-48. On settled position in law there can be no two answers to this question.

5. In Baladin Ram v. Commissioner of Income-tax, the Supreme Court has taken the view that it is now well-settled that the only possible way in which income from an undisclosed source can be assessed or reassessed is to make the assessment on the basis that the previous year for such an to make the assessment on the basis that the previous year for such an income would be the ordinary financial year. The ratio of this case is directly applicable and the accounting year in view of the declaration made will be April 1, 1945, to March 31, 1946, and such income from undisclosed sources can only be assessed for the assessment year 1946-47. That being the position it is patent that there is no evidence or material on record to show that this income from undisclosed sources was assessable for the assessment year 1947-48.

6. In the result, question No. 1 is answered in the negative. In view of answer to question No. 1 questions Nos. 2 and 3 do not survive. As the question on behalf of the assessee was raised for the first time before us justice of the case requires that each party will bear its own costs.


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