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Smt. Sushila Devi Sharma Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 341 of 1972
Judge
Reported in[1980]123ITR77(All); [1980]4TAXMAN23(All)
ActsIndian Income Tax Act, 1922
AppellantSmt. Sushila Devi Sharma
RespondentCommissioner of Income-tax
Appellant AdvocateS.C. Khare, Adv.
Respondent AdvocateR.K. Gulati and ;Ashok Gupta, Advs.
Excerpt:
- - the tribunal accepted the appeal filed by the department and held that the assessee had failed to explain the source of rs. it affirmed the finding of the ito and the aac that the assessee had failed to explain the source of the remaining amount of rs. (1) the assessee had failed to place any material on the record regarding the source of the loan advanced to sri mangal datt shastri......the assessee had failed to place any material on the record regarding the source of the loan advanced to sri mangal datt shastri. (2) the date on which the loan was advanced in the year 1955 was not on the record. (3) there was nothing on the record to show that mangal datt shastri was a genuine person who had received the loan from the assessee in the year 1955 and had returned the same in cash on 4th of september, 1959. 5. on behalf of the assessee reliance in respect of her case was placed primarily on the circumstance that in the returns filed by her for the assessment years 1956-57 to 1959-60, she had been showing the interest income received from mangal datt shastri. the tribunal did not attach importance to this circumstance as the returns for the years 1956-57 to.....
Judgment:

H.N. Seth, J.

1. The Income-tax Appellate Tribunal has referred the following question of law for the opinion of this court:

' Whether, upon the facts and circumstances of the case, the finding of the Income-tax Appellate Tribunal is valid in law that the amount of Rs. 30,000 and Rs. 25,000, respectively; represented the income of the assessee from an undisclosed source '

2. The assessee is an individual carrying on the business as the agent of Baidyanath Ayurved Bhawan Private Ltd. While making assessment for the year 1960-61, relevant accounting year for which was the financial year ending 31st March, 1960, the ITO found that the assessee had advanced a loan of Rs. 55,000 to one Banwarilal. When called upon to explain the nature and source of the loan, the assessee explained that in the year 1955, she had given a loan of Rs. 30,000 to one Sri Mangal Datt Shastri who paid it back to her on 4th September, 1959. She sold ornaments worth Rs. 28,298 in the year 1955 and it was from out of the sale proceeds of those ornaments and the money received from Mangal Datt Shastri that she advanced the loan in question to Banwarilal. The ITO did not accept the explanation offered by the assessee and added a sum of Rs. 55,000 to her income as income from some undisclosed source. Being aggrieved, the assessee went up in appeal before the AAC, who accepted the claim of the assessee that she had in the year 1955 advanced a loan of Rs. 30,000 to Mangal Datt Shastri and that she received back the amount on 4th September, 1959, as claimed by her. The source for this much of the amount advanced to Banwarilal, therefore, had been adequately explained. So far as the remaining amount of Rs. 25,000 was concerned, he rejected the assessee's explanation. In the result, he partly allowed the appeal and granted relief to the assessee to the extent of Rs. 30,000.

3. Being aggrieved, both the assessee and the department went up in appeal before the Income-tax Appellate Tribunal. The Tribunal accepted the appeal filed by the department and held that the assessee had failed to explain the source of Rs. 30,000, which according to her, she had received from Mangal Datt Shastri. It affirmed the finding of the ITO and the AAC that the assessee had failed to explain the source of the remaining amount of Rs. 25,000. In the result, the appeal filed by the department was allowed and that filed by the assessee was dismissed, and the addition of Rs. 55,000 to the income returned by the assessee, made by the ITO, was upheld. The assessee then obtained orders from this court requiring the Tribunal to state the case and to refer the aforementioned question of law for its opinion.

4. So far as the amount of Rs. 30,000 is concerned, the assessee claims that she had advanced a loan of Rs. 20,000 to Sri Mangal Datt Shastri in the year 1955. On this loan, Sri M. Shastri paid interest from time to time which she had already shown in the income-tax returns for the relevant years. It was this amount which was returned to her and was available for being advanced to Banwarilal. The Tribunal rejected the explanation of the assessee in this regard on the following grounds:

(1) The assessee had failed to place any material on the record regarding the source of the loan advanced to Sri Mangal Datt Shastri.

(2) The date on which the loan was advanced in the year 1955 was not on the record.

(3) There was nothing on the record to show that Mangal Datt Shastri was a genuine person who had received the loan from the assessee in the year 1955 and had returned the same in cash on 4th of September, 1959.

5. On behalf of the assessee reliance in respect of her case was placed primarily on the circumstance that in the returns filed by her for the assessment years 1956-57 to 1959-60, she had been showing the interest income received from Mangal Datt Shastri. The Tribunal did not attach importance to this circumstance as the returns for the years 1956-57 to 1959-60 filed by the assessee had been accepted without scrutiny, suggesting that the assessee might have disclosed the interest income for some ulterior purpose and, as such, this circumstance could not outweigh the other circumstances which went against the assessee.

6. Sri S. C. Khare, learned counsel appearing for the assessee, tried to impugn the finding recorded by the Tribunal in this regard, which apparently is a finding recorded as a result of appreciation of evidence, on the basis of certain allegations contained in an affidavit filed on behalf of the assessee in this court. We find that this affidavit is not a part of the statement of the case. Even though before the Tribunal submitted the statement of the case to this court, it invited objections from the assessee, the assessee did not object to it on the ground that the said affidavit should also be made a part of the statement. It has been held by the Supreme Court in CIT v. Mewar Textile Mitts Ltd. : [1966]60ITR169(SC) , that it is not consistent with the advisory jurisdiction of the High Court under the Indian I.T. Act, 1922, that the Appellate Tribunal should attach to the statement of the case documents other than proceedings of the income-tax authorities which are not mentioned and discussed either in its own appellate order or in the statement of case. In deciding a dispute arising as to the interpretation of a document so annexed, the High Court would be deciding questions not decided by the Appellate Tribunal and which the High Court would be incompetent to decide under the I.T. Act.

7. Applying the principle underlying these observations, it is obvious that it is not possible for us to take the facts mentioned in the affidavit relied upon by the assessee into consideration. In our opinion, the circumstances mentioned by the Tribunal were such on the basis of which it could come to the conclusion that the assessee's allegation that she received a sum of Rs. 30,000 from Sri Mangal Datt Shastri which went to constitute a part of the loan said to have been advanced to Banwarilal was not correct and that the amount represented the income of the assessee from some undisclosed source.

8. So far as the remaining amount of Rs. 25,000 is concerned, the assessee explained that this amount came out of the sale consideration of her ornaments which she sold in the year 1955 for a sum of Rs. 28,298. The Tribunal pointed out that the loan to Sri Banwarilal was advanced in the year 1959 and that it was difficult to believe that the money obtained by sale of ornaments as far back as 1955 was available for being utilised by the assessee in advancing the loan to Sri Shastri. This again is a question of believing or not believing the explanation offered by the assessee. The Tribunal could, in the circumstances of the case, disbelieve the explanation given by the assessee on the ground mentioned by it and record a finding that this amount of Rs. 25,000 also represented income from some undisclosed source.

9. In the result, we answer the question referred to us in the affirmative and in favour of the department.

10. The CIT shall be entitled to receive a sum of Rs. 200 as costs from the assessee.


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