JAGANMOHAN REDDY C. J. - We had directed the Income-tax Appellate Tribunal to state a case on the following question, viz., whether the inclusion of the entire interest credited in the account books of Cine Supplies Private Ltd., Bangalore, in the joint loan account of M/s. B. R. Patel, I. A. Patel and H. R. Patel in the assessments of the assessee is legal ?
The statement of the case discloses the following facts : The assessee is an individual and the assessment years are 1952-53 and 1953-54, for which the relevant accounting years are Divali years ending with October 31, 1951, and October 18, 1952, respectively. The assessments complained of were completed under section 23(3) read with section 34(1)(a) of the Income-tax Act, 1922 (hereinafter referred to as 'the Act'), proceedings under the later section having been initiated on the ground that the interest received from Cine Supplies Private Ltd., was not disclosed in the original returns. The case of the assessee B. R. Patel was that the loan in question was on account of a joint account in favour of B. R. Patel, the assessee, I. A. Patel and H. R. Patel, all the three being jointly liable under promissory notes to one Budan Saheb of Hindupur in this way, namely, that the assessee who had borrowed a sum of Rs. 1,50,000 from the said Budan Saheb, was indemnified by I. A. Patel and H. R. Patel, being the two sureties in respect of the said loan. It is in respect of this undertaking as surety that a sum of Rs. 1,50,000 which was standing in the assessees account in the Cine Supplies Private Ltd., was transferred by the assessee, to the joint loan account of the assessee, I. A. Patel and H. R. Patel. In these circumstances, it was contended by the assessee that the interest on the said sum was not wholly taxable in the assessees hands and only 1/3rd was liable to be brought to tax. The Income-tax Officer after setting out the history of that loan, the raising of th loan of Rs. 1,50,000 from Budan Saheb and the manner in which a sum of Rs. 1,50,000 was transferred to the joint account, came to the conclusion that there was no consideration for giving credit of Rs. 50,000 each to I. A. Patel and H. R. Patel in the so-called joint loan account of Cine Supplies Private Ltd., and, therefore, held that the entire interest thereon acrued to the assessee. He also held, that no part of the loan of Rs. 1,50,000 from Budan Saheb was utilised for business; as such, the entire interest receipt in the hands of the assessee attracted tax. In appeal, the Appellate Assistant Commissioner confirmed the Income-tax Income-tax Officers findings. At the stage of further ap peal before the Income-tax Appellate Tribunal, for the first time it was contended that 1/3rd amount of interest on Rs. 1,50,000 was assessed on I. A. Patel and another 1/3rd on H. R. Patel. But the Tribunal rejected that contention, on the ground that there was no evidence or material before it to come to that conclusion. They refused to consider the circumstance that I. A. Patel an H. R. Patel had made voluntary returns of 1/3rd interest, as an indication of double taxation.
Before us, Mr. Ramarao, learned counsel for the assessee, contends vehemently that the principle of double taxation has been contravened and the assessments on B. R. Patel, the assessee, is illegal. While th principle of law is clear, namely, that no income can be chargeable twice in the hands of the same individual or in the hands of different individuals, the question before us is whether there was in fact evidence to support the contention of the assessee that there was in fact double taxation.
It may be remembered that the Income-tax Officer found as a fact that there was in fact no primary liabilities of the other two persons, viz., I. A. Patel and H. R. Patel, and that the amount of Rs. 1,50,000 was not utilised in business. As long as that finding is there - there being no other evidence to the contra in this case - the assessee cannot successfully contend that this is a case of double taxation. The primary liability for payment of tax on the interest on Rs. 1,50,000 was upon the assessee, on the ground that the entire money belonged to him and there was no liability on him to pay 1/3rd amount each to the other two persons. Nor is there evidence to show that I. A. Patel and H. R. Patel were entitled to 1/3rd amount of interest on Rs. 1,50,000. The presumption in income-tax law is that unless the assessee who claims a particular advantage, or benefit of a particular provision of the Income-tax Act, establishes aliunde by evidence that fact or those facts, he cannot counted with any force that the Income-tax Officer was not justified in assessing him normally under the provisions of the Act as if the income belonged to him. As we have said earlier, there is absolutely no evidence in this case to show that the interest earned on Rs. 1,50,000 did not accrue to the assessee or that the assessee was not entitled to it. In fact, the system of mercantile accounting maintained by the assessee equally establishes that this amount of interest accrued to him and that he is liable to be assessed for that amount in his hands. In this view of the matter, we answer the reference in the affirmative with costs. Advocates fee Rs. 250.
Question answered in the affirmative.