1. At the instance of the assessee pursuant to the application of the applicant the High Court had required the Tribunal to refer the following question for our determination :
'Whether the burden of proving the sources of acquisition of the assets by the deceased, Tulsiram Devidayal, was the same as in the case of acquisition by the assessee himself, and whether on the facts and in the circumstances of the case the assessee has discharged the burden of proof ?'
2. Assessee, Lala Gopaldas T. Agarwal, is the legal heir of late Lala Tulsiram Devidayal who died on March 9, 1060. Lala Gopaldas is an assessee in his representative capacity is respect of income of his father, late Lala Tulsiram. The question relates to the assessment year 1957-58, for which the corresponding previous year ended on March 31, 1957. Tulsiram filed a return of his income for the assessment year 1957-58 on June 27, 1958, disclosing an income of Rs. 28,057 as under :
Rs.1. Remuneration received from Devidayal Sales Pvt. Ltd. 22,5002. Property income 4953. Net income from interest on amounts deposited with M/s.Devidayal Tulsiram Finance Corporation 5,061
3. The income-tax assessment of Lala Tulsiram for this year was not completed by the Income-tax Officer. Regarding wealth-tax assessment, notice under section 14 of the Wealth-tax Act was served on Lala Tulsiram during his lifetime for the assessment year 1957-58. By his letter dated January 20, 1958, he informed the Wealth-tax Officer that his net wealth was below the taxable limit and hence he was not sending the return. NO further action was taken during his lifetime. The explanation of Lala Gopaldas was that these amounts did not represent his personal income but were saved by his father from the considerable profits that he earned right from 1918 onwards. The Income-tax Officer did not accept this explanation. He took the view that the amount was kept as secret income of Gopaldas which he tried to bring to surface by claiming it to be his inheritance from his father. In supporting the addition in the case of Gopaldas, the Income-tax Officer relied upon the statement if total wealth made by Tulsiram on March 17, 1949, in respect of his wealth owned by him as on March 31, 1948. That statement showed holding of jewellery at Rs. 15,000 and the declaration at the end of the statement was as under :
'Assets include investments of all kinds in the names of my wife and minor children. I have no investments standing in the name of my wife or minor children.'
4. By way of precaution, the Income-tax Officer also added this amount of Rs.1,70,000 in the assessment of the estate of Tulsiram represented by Gopaldas and that is the assessment which has given rise to this reference.
5. Separate appeals were filed before the Appellate Assistant Commissioner both on behalf of the estate of Tulsiram and by Gopaldas in his individual capacity. The Appellate Assistant Commissioner confirmed the addition of Rs.1,70,000 to the income of the estate of Tulsiram but deleted the same addition from the income of Gopaldas in his individual capacity. One of the main grounds for coming to this conclusion was that jewellery worth Rs.1,50,000 owned on March 31,1957, by Tulsiram could not be traced to jewellery worth Rs. 15,000, declared as on March 31,1948, and there was no other source of funds from which the acquisition of the jewellery could be explained.
6. The assessee on behalf of the estate of Tulsiram preferred an appeal before the Tribunal. It was urged on his behalf that he was handicapped in that he did not know all the data relating to the assessment of his father's estate and that in the circumstances he had done the best he could to indicate the possible source of the two assets which formed the wealth of his father as on March 31,1957. It was stated on his behalf that Gopaldas had declared the value of jewellery owned by his father on March 31,1957, because, in pursuance of his father's will, he had come into possession of the jewellery, the bulk of which was sold and disposed of according to his father's wishes after his death. The value of jewellery was more or less accepted by the estate duty authorities and the position, therefore, could not be disputed that the jewellery belonged to Tulsiram. It was contended on his behalf that the funds from which the assets worth Rs. 1,70,000 were acquired by Tulsiram were three-fold. First, it was said that Tulsiram was assessed on large incomes and even from the assessment year 1948-49 to 1957-58, the total income assessed was Rs. 4,78,072. This included income accruing to his wife from the trust created by Tulsiram himself and this income itself was about Rs.1,75,927. It was urged that there was nothing improbable in Tulsiram acquiring jewellery worth Rs.1,50,000 and having cash balance of Rs.20,000. Secondly, it was urged which he was interested and in the year 1959 itself he had withdrawals from the business in which he was interested and in the year 1959 itself he had withdrawn an amount of Rs.2,67,000 which could have been utilised for purchase of jewellery. Lastly, it was urged that Tulsiram had admitted in 1949 that his wife possessed jewellery worth Rs.15,000 as on March 31,1948. His wife died in 1956 and the jewellery was acquired at the time of his marriage more than 30 years ago. At that time the price of gold her tola was Rs.20. It was said that in the statement made in the year 1949, the value of Rs.15,000 was shown at the original coast and that jewellery would have been worth more than a lakh of rupees by March 31,1957. It was made clear before the Tribunal that these alternative contentions were urged on behalf of the assessee on probabilities because the assessee did not have particulars of the withdrawals of Tulsiram or his expenditure or his acquisition of assets like jewellery. On these submissions the addition of Rs.1,70,000, it was said, was not justified.On the other hand, it was urged on behalf of the revenue that no satisfactory account of the acquisition by Tulsiram of jewellery worth Rs.1,50,000 had been given by the assessee. It was also urged that in the statement that was filed in the year 1949 jewellery as on March 31,1948, which included jewellery belonging to Tulsiram and his wife was not shown at cost but was shown at its real worth as on March 31, 1948, and having regard to the movement of the price of gold between 1948 and 1957 there was no noticeable rise which could explain the acquisition of jewellery worth Rs. 1,50,000 by Tulsiram as on March 31, 1957. Further, it was urged that the vouchers of sale that were brought on record indicated that what was sold was gold and not jewellery and that even in the Dharam Kanta Certificates and bills or refinery there was no mention of ornaments or jewellery. It was also urged on behalf of the revenue that Tulsiram had disposed of some gold and jewellery worth Rs. 49,000 in order to meet his taxes and, therefore, the bulk of jewellery that was shown in the statement of the year 1949 as belonging to Tulsiram and his wife would have been utilised for payment of taxes. Reference was also made to the statement of total wealth made by Tulsiram on May 16, 1954, giving particulars of the wealth of Tulsiram as on October 30, 1951. In this statement jewellery was valued at Rs. 15,000 and that Tulsiram shown Rs. 2,000. Reference was also made to the fact that Tulsiram had not withdrawn any sizable amounts which were invested in tangible assets and that the withdrawal up to and including the large withdrawal in 1951 would have been used away either in secret investments or in personal expenditure. In short, it was urged on behalf of the revenue that he certainly failed to give a complete account of income and disbursement of Tulsiram and he had also failed to give any details of purchase of jewellery which was held by Tulsiram as on March 31, 1957.
7. The Tribunal confirmed the order of the Appellate Assistant Commissioner as regards the inclusion of the amount of Rs. 1,50,000 in the total income of Lala Tulsiram. According to the Tribunal, the assessee clearly failed to trace the jewellery shown as on March 31, 1957, to the jewellery as held on March 31, 1948. The Tribunal pointed out that it was called upon to accept the explanation based on bits of evidence here and there and each bit of evidence leaves considerable room for drawing inferences either way. In order to accept the contention of the assessee that this jewellery was existing as on March 31, 1948, one has to presume that all the jewellery was existing as on March 31, 1948, one has to presume that all the jewellery belonged to Lala Tulsiram's wife, that the value as declared on March 31, 1948, was the cost of that jewellery 30 years earlier and that the jewellery was intact not only at the time of the lady's death but also on March 31, 1957, to be handed over to Lala Gopaldas on the death of Lala Tulsiram. The Tribunal also pointed out that it will be required to ignore the gap in evidence regarding conversion of jewellery into gold and also ignore that other possibilities of disposal of ornaments, namely, transfer to daughters and other sons by Tulsiram's wife.As regards the case of cash withdrawal, the Tribunal pointed out that there was not a single big withdrawal brought to its notice which could reasonably be said to be available for purchase of jewellery. The amount of Rs. 2,67,000 with drawn in 1951 was clearly not used for purchase of jewellery or any other asset, because the statement of total wealth as on October 31, 1951, did not show any indication of such withdrawals having been made for the purpose of investment. Equally the plea about considerable income of Lala Tulsiram and his wife suffers from various infirmities. Undoubtedly, there were considerable incomes, but the same were liable to taxes and there was no accounting of the taxes and other expenditure which were met from those income or investments which were made from those incomes. Further, the Tribunal took notice of the fact that there was a plea about sale of jewellery for meeting the tax liabilities. Such a plea was irreconcilable with the claim on behalf of the assessee that he had considerable funds for purchase of jewellery. had considerable funds available there was no reason for If he had considerable funds available there was no reason for jewellery being sold for meeting the tax liabilities, especially when the plea was made that the cash available was out of bona fide withdrawal from the assessee's account in the business in which he was interested. Accordingly, the Tribunal took the view that the assessee failed to establish the source of funds with which jewellery was acquired, that such matter was within the special knowledge of the assessee and it should not have been difficult to lead evidence in support of the assessee's claim, if any such evidence was available. According to the Tribunal the income-tax authorities were justified in treating the amount of Rs. 1,50,000 as the assessee's income from undisclosed sources. So far as the additional sum of Rs. 15,000 is concerned the facts need not be gone into elaborately because in the course of the arguments no plea was advanced in that behalf. It is from this order of the Tribunal that the above question arises for our determination.
8. Mr. Dastur on behalf of the assessee contended that the assessee was required to file the return and give explanation as the legal heir of his deceased father, Tulsiram; that if Tulsiram himself had to give information then he would have been in a position to do so but the heir who is required to file a return in respect of the income of a deceased person may not have as elaborate information as the deceased himself had about his income. Thus, the burden of proving the source of acquisition of the assets is not the same on the legal heir as in the case of the burden qua acquisition on the deceased assessee himself. As regards the second part of the question he submitted that the taxing authorities and the Tribunal were in error in coming to the conclusion that the assessee failed to discharge the burden of proof.
9. At the outset, it may be stated that, so far as the first part of the question is concerned, there can be no general proposition of law applicable to all cases irrespective of the facts and circumstances thereof. One thing which can be said without much hesitation is that the burden is always on the assessee, if an explanation is asked for by the taxing authorities or the Tribunal, to indicate the source of acquisition of a particular asset admittedly owned by the person concerned. It will depend upon the facts of each case to decide what type of facts will be regarded as sufficient to discharge such onus, nor can the onus be different qua different persons, namely, one type of burden on the assessee and another type of burden on the legal heir. If regard be had to the facts of the present case, one thing is patently clear that, on the material on record, even though Gopaldas had to give explanation as the legal heir of Tulsiram, he was in a better position to give an explanation about the acquisition of his father, then the father himself would have been able to do. In the will left by deceased Tulsiram it is clearly stated that, due to his old age and incapacity to walk, his son Gopaldas (who is the assessee before us) served him and followed his advice and had been keeping him with him in his own premises. We are informed by the counsel for the assessee that the assessee while recording the statement has mentioned that Gopaldas was born in 1907. If Gopaldas was born in 1907 then bearing in mind the age of Tulsiram at the time when Gopaldas was born, it will be quite evident that during 1948 to 1957 it is more probable that Gopaldas would be in charge of the affairs of deceased Tulsiram. Actually by the will Tulsiram has left the rest and residue of his property to his son, Gopaldas, in view of the services rendered by him as mentioned above. If that was so, then it is quite evident that Gopaldas was in no way unable to give relevant information from 1948 onwards as regards the financial affairs of his father and his source of income and it is not possible for us to lay down any principle of law as regards the extent of the burden to be discharged by a legal heir irrespective of the special facts of the case.
10. So far as the second aspect of the question is concerned, namely, whether the burden has been discharged to indicate the sources of acquisition, in view of what we have pointed out it is a pure question of fact and it will not be appropriate for this court to reappreciate the material on record with a view to come to the conclusion whether the evidence is sufficient to discharge that burden.
11. In that view of the matter our answer to the question referred is as under :
So far as the question referred to us is concerned, whether the burden of proving the source of acquisition is the same upon the assessee as that upon the deceased will depend upon the facts of each case and, as we have pointed out earlier, bearing in mind the facts of the present case, the assessee, Gopaldas, the legal heir, was much better equipped to discharge this burden than the father would have done in view of his old age at the time when the acquisitions were made. In view of the finding of the Tribunal so far as the second part of the question is concerned, we accept the finding of the Tribunal that the burden has not been discharged by Gopaldas as regards the source of acquisition.
12. In the result, the assessee shall pay the costs of the revenue.