R.R. Rastogi, J.
1. The Income-tax Appellate Tribunal, Allahabad Bench, has referred the following questions for the opinion of this court :
' 1. Whether, on the facts and in the circumstances of the case, the Tribunal had any material to sustain any income from undisclosed source ?
2. Whether the assessee having been dead before the commencement of proceedings, on the facts of the case the legal heir had failed to discharge the onus of any proof of which he could have any personal knowledge '
2. The brief facts giving rise to these questions are that one Kanhaiya Lal had two sons, Inder Prasad and Jagmohan Das. Smt. Rampa Devi was the wife of Jagmohan Das and Bate Krishna was their son. Smt. Rampa Devi had made a will of cash and ornaments, which she possessed in favour of Bate Krishna on June 9, 1963. She died on November 10, 1963, and on November 28, 1963, which would be relevant for the assessment year 1964-65, Bate Krishna introduced in his books capital amounting to Rs. 86,907. The ITO, accordingly, issued a notice under Section 148 of the I.T. Act, 1961, to Chandra Krishna, son and legal representative of Bate Krishna. Pursuant to that notice, the assessee filed a return showing nil income and about the above capital explained that his grandmother, Smt. Rampa Devi, had given cash and ornaments by means of a will made in favour of his father and that, on her death, in the estate duty proceedings, the principal value of her estate was determined at Rs. 1,49,000 which included Rs. 73,000 cash in hand and silver coins of the value of Rs. 13,907. The ITO did not accept the assessee's contention and treated the aforesaid amount of Rs. 86,907 as the assessee's income from undisclosed sources under Section 69 of the Act.
3. The assessee appealed. The AAC accepted the genuineness of the will and on the basis of the estate duty proceedings held that Smt. Rampa Devi had Rs. 73,000 cash in hand apart from jewellery, silver coins, etc. He thus accepted the assessee's contention and quashed the assessment.
4. The department then preferred an appeal before the Appellate Tribunal. After hearing the parties and considering the documents on record the Tribunal held that there was no direct evidence to explain the nature of the amount in dispute satisfactorily, but from the documents it was evident that Smt. Rampa Devi belonged to a very rich and respectable family and at one time this family was possessed of Rs. 7,00,000 which in those days was a very big amount. They thus accepted the assessee's explanation with regard to jewellery and silver ornaments in toto, but as for cash, accepted it to the extent of Rs. 35,000 only and treated thebalance of Rs. 38,000 as unexplained investment in the hands of the deceased, Bate Krishna. The assessment was thus confirmed at Rs. 38,000 as income from undisclosed sources.
5. It was submitted before us on behalf of the assessee by Sri R. V. Gupta that on the facts found by the Tribunal the addition could not have been made. After hearing parties' counsel, we are inclined to accept this submission. It is important to note that the AAC had accepted the genuineness of the will. He had further referred to the principal value of the estate of Smt. Rampa Devi as determined in the estate duty proceedings. The cash in hand was taken at Rs. 73,000. Besides that there were jewellery, silver coins and other things. The Tribunal accepted the fact that Smt. Rampa Devi belonged to a very rich and respectable family. The family's income-tax assessment for the assessment year 1927-28 was also referred to before the Tribunal and their attention was invited to the litigation which had gone up to the Privy Council and in those old days the family was worth Rs. 7,00,000. On the basis of this the Tribunal accepted the assessee's explanation in regard to jewellery and silver ornaments and also in regard to cash to the extent of Rs. 35,000. It has also been seen that in the estate of late Smt. Rampa Devi there was Rs. 73,000 cash in hand. We fail to understand as to on what basis the Tribunal rejected the explanation with regard to the remaining sum of Rs. 38,000. There was absolutely no basis or material for doing so and thus the estimate of unexplained investment was based purely on surmises and conjectures. On the facts found and accepted by the Tribunal the explanation should have been accepted in regard to the entire property claimed to have been left by Smt. Rampa Devi and it was out of those assets that the amount of Rs. 86,907 was introduced as capital in his books by late Bate Krishna on November 28, 1963.
6. For the reasons stated above, we do not agree with the view taken by the Tribunal for sustaining the addition of Rs. 38,000 and we answer both the questions in the negative, in favour of the assessee and against the department. The assessee is entitled to his costs which we assess at Rs. 200 and counsel's fee in like amount.