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Abu Bucker Sait Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case Nos. 117 and 118 of 1966
Judge
Reported in[1970]76ITR362(Mad)
ActsIncome Tax Act, 1922 - Sections 22(2), 28(1) and 66(2)
AppellantAbu Bucker Sait
RespondentCommissioner of Income-tax
Appellant AdvocateM.S. Venkatarama Iyer, Adv.
Respondent AdvocateV. Balasubrahmanyan and ;J. Jayaraman, Advs.
Cases Referred(vide Janab Abubucker Sait v. Commissioner of Income
Excerpt:
- - he, however, failed to explain properly the source of purchase price to the tune of rs. the appeal to the appellate assistant commissioner and a second appeal to the tribunal were unsuccessful. the tribunal rightly, once again, rejected the contentions, brought to tax the amount in dispute and expressed its view that the assessee failed to substantiate his contentions. the tribunal finds that the figures furnished by the assessee are not supported by evidence and it is incredible as well to believe that such a large money was kept by the assessee intact with him without being banked or invested. he failed. this is a case in which every limb of section 28(1)(c) is satisfied and the levy of the penalty is therefore justified......act, 1922, filed a nil return. the revenue, however, discovered that during the assessment year the assessee purchased a property bearing door no. 20, godown street, madras, in the name of his wife, the total consideration for the purchase of which amounted to rs. 2,61,935. when confronted with this purchase during the accounting year, the assessee gave an explanation that his wife purchased the property from funds belonging to her, from funds provided by her mother-in-law and the assessee and from funds borrowed by her. the property was an evacuee property and there was an occasion for the assessee to give a sworn statement before the assistant custodian of evacuee properties setting out therein the circumstances under which he secured a portion of the purchase price. he,.....
Judgment:

Ramaprasada Rao, J.

1. The assessee owns 150 acres of coffee plantations and another 60 acres of land, in which it is claimed there are orchards and fruit growing trees. As a matter of fact, the assessee daring the course of one assessment year claimed that the approximate income by sale of oranges and all nuts from such orchards, etc., was Rs. 3,000. During the assessment year 1950-51, the assessee after being served with a notice under Section 22(2) of the Indian Income-tax Act, 1922, filed a nil return. The revenue, however, discovered that during the assessment year the assessee purchased a property bearing door No. 20, Godown Street, Madras, in the name of his wife, the total consideration for the purchase of which amounted to Rs. 2,61,935. When confronted with this purchase during the accounting year, the assessee gave an explanation that his wife purchased the property from funds belonging to her, from funds provided by her mother-in-law and the assessee and from funds borrowed by her. The property was an evacuee property and there was an occasion for the assessee to give a sworn statement before the Assistant Custodian of Evacuee Properties setting out therein the circumstances under which he secured a portion of the purchase price. He, however, failed to explain properly the source of purchase price to the tune of Rs. 66,640. It is common ground that the assessee maintained no accounts for his agricultural income, and indeed no evidence to support the preservation of a substantial amount of cash at or about the time of the purchase was ever forthcoming. The assessee, however, relied on a casual finding given by the department during the prior assessment year 1949-50, that his agricultural income might be Rs. 15,000 and wanted to make out a case that the unaccounted amount as above could be explained in the manner stated by him. The fact, however, remains that -he was assessed on an undisclosed income even for the prior year (vide Janab Abubucker Sait v. Commissioner of Income-tax, : [1962]45ITR37(Mad) , The Income-tax Officer held that the unexplained substantial cash balance of Rs. 66,640 should be considered to have emanated from undisclosed sources and assessed as such. The appeal to the Appellate Assistant Commissioner and a second appeal to the Tribunal were unsuccessful. In fact the Appellate Assistant Commissioner found after referring to the various items of receipts that there was nothing to substantiate them, that no details were available to show from whom and on what dates the various amounts had been realised or expended, that there were no accounts, balance-sheet or any other statement showing the. assets and liabilities of the assessee, that the income shown in the statement as baying come out of the coffee estates were merely an estimate and equally was the estate expenditure and that the statement did not include any personal expenses. Ultimately, he rejected the assessee's explanation and brought to tax such undisclosed income. In the second appeal before the Tribunal, the assessee was conscious of his limitations and in fact the learned counsel for the assessee, who argued his case before the Tribunal, fairly conceded that there were inconsistencies, contradictions, untrue statements, etc., in the various versions made by the assessee, but he would require the Tribunal to consider the circumstances in the background of human nature. The Tribunal rightly, once again, rejected the contentions, brought to tax the amount in dispute and expressed its view that the assessee failed to substantiate his contentions. On an application made by the assessee under Section 66(2) of the Act the Tribunal referred the following question for our decision :

'Whether, on the facts and in the circumstances of the case, the assessment of the sum of Rs. 66,640 in the assessment year 1950-51 as income from undisclosed sources is lawful ?'

2. Mr. M. S. Venkatarama Iyer, learned counsel for the assessee, repeated the same contentions urged by him earlier. He, however, fairly concedes that the assessee has no accounts to substantiate his story and trace the money to any acceptable or conceivable quarter. The Tribunal found on an overall consideration of the facts and circumstances attendant upon the case and after weighing the pros and cons, relating thereto that the prevaricating, self-serving and irreconcilable explanations of the assessee were not at all convincing. It is noticed by us that the assessee was in the habit of banking small cash balances. As to why he did not bank such a substantial amount of Rs. 66,640,-no convincing explanation is forthcoming. It is admitted that there are no accounts. The stories weaved out from time to time by the assessee are so weaved from his imagination. and not from facts or any acceptable circumstances relating to the question under reference. The Tribunal finds that the figures furnished by the assessee are not supported by evidence and it is incredible as well to believe that such a large money was kept by the assessee intact with him without being banked or invested. According to the Tribunal, the assessee would stoop to any level to ward off the tax liability. The assessee tried to make out that the consideration for the purchase of the property belonged to his wife; he failed. Then he changed his version and asserted that he had ample agricultural income from which source he could provide the funds for the purchase. No buyer was examined to prove the quantum of sales of such agricultural produce or the nature of such produce said to have been obtained by him from his estate. One can easily conceive that agricultural produce of such a magnitude to be conveyed from the estate such as Yercaud to other places would necessarily involve conveyances such as lorries or any other acceptable mode of transport. No explanation is given as to why the person, who transported such imaginary agricultural produce, was not even examined or any voucher produced to satisfy the revenue that such an expenditure was incurred at all. In our opinion, the assessee never had any regard for truth. Besides, he was hopelessly inconsistent and was prepared to change his stand according to circumstances. The Tribunal on the material before it came to a conclusion, which is reasonable, prudent and acceptable. It cannot be said to be perverse at all. We are therefore unable to interfere with the finding of fact rendered by the Tribunal which said that the amount of Rs, 66,640 should be deemed to be income from undisclosed sources and therefore exigible to tax in the normal course. We are obliged to answer the question against the assessee. T.C. No. 117 of 1966 is therefore dismissed with costs. Counsel's fee Rs. 250.

3. As we have dismissed T.C. No. 117 of 1966, T.C. No. 118 of 1966 also has to be dismissed. We find as a matter of fact that the assessee did conceal his income and took untenable stands before the revenue as it suited him. This is a case in which every limb of Section 28(1)(c) is satisfied and the levy of the penalty is therefore justified. The Tribunal came to the correct conclusion. The question therefore has to be answered against the assessee. The tax case also is dismissed; but, in the peculiar circumstances, there will be no order as to costs.


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