1. This is a reference under section 66(2) of the Indian Income-tax Act in compliance with the order of this court dated July 20, 1959, made in C.P. (H) No. 44 of 1956.
2. The question submitted to this court are as follows :
'(i) whether, on the facts and circumstances of the case, the assessing authority should have assessed the cash credit of Rs. 10,700 as income from undisclosed sources for the assessment year 1952-53 or 1953-54
(ii) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in recording a finding that the cash credit of Rs. 10,700 is income from undisclosed sources without considering the assessee's explanation of having brought the said amount from his home treasury ?'
3. The facts as found by the Tribunal are as follows :
The assessee is a Hindu undivided family. The assessment year is 1953-54, the relevant accounting year being the year ended on October 18, 1952.
4. In the personal account of Konkalkonda Govindappa on ledger folio 52 two cash credits of Rs. 10,500 and Rs. 200 were found on November 16, 1951, and November 21, 1951, respectively. When the assessee was asked to explain the source for the said credits, the withdrawals of Rs. 6,170 in the preceding year referred to. The assessee did not correlate the withdrawals in question with the deposits apart from the circumstances that the withdrawals amounted to only Rs. 6,170 whereas the cash that the amounts were from cash lying idle in his house, which,. according to the assessee, was about Rs. 2 lakhs. Since the assessee did not produce any home chest account, the Income-tax officer did not accept the explanation of the assessee and added a sum of Rs. 10,700 as profits from sources undisclosed.
5. When this matter was taken up before the Appellate Assistant Commissioner he agreed with the conclusions of the Income-tax officer and sustained the addition in question.
6. Then the assessee took up the matter to the Tribunal where the same explanation was given by the assessee in regard to the source of the two credits in question but the Tribunal observed that even according to the assessee, the withdrawals amounted to only Rs, 6,170 and since there was nothing to connect these withdrawals with the deposits made by the assessee, it upheld the decisions of the income-tax authorities.
7. On the proved facts of the case, it is quite clear on the basis of the decided authority to which no reference need be made as counsel on either side are agreed on the point that the income in question should be considered as income for the accounting year ending March, 31,1952. Therefore the said income must be considered as income for the year 1952-53. The Tribunal has held that it is the income accruing in the assessment year 1953-54. This is clearly wrong. The learned counsel for the revenue contended before us that this question had not been raised before any of the tribunals below us that this question had not been raised before any of the tribunals below and that being so, we should not allow the assessee to raise that question at this late state. As mentioned earlier, this is a reference made in pursuance of an order made by this court. If the contention advanced on behalf of the revenue had any force in it, the same should have been advanced at the earlier state and not at this state : see Chotanagpur Banking Association Ltd. v. Commissioner of Income-tax, wherein a Bench of the Patna High Court laid down that, where an order directing reference under section 66(2) of the Income-tax Act is passed by a Bench of the High court after hearing both the counsel of the parties, it is not open to the Bench hearing the reference to say that the order passed by the former Bench was erroneous on the ground that the question referred to did not arise out of the Tribunal's order.
8. For the reasons already mentioned, our answer to question No. (i) is that, on the facts and circumstances of the case, the assessing authority should have assessed the cash credit of Rs. 10,700 as income from undisclosed sources for the assessment year 1952-53 and not 1953-54
9. In view of the above answer, the assessee did not press for any answer on question No. (ii).
10. In the circumstances of this case, we make no order as to costs.