LEACH, C. J.-For the year 1930-40, the assessee returned an income of Rs. 1,604-0-6 which had been arrived at after taking into account an alleged loss of Rs. 176-10-6 in respect of his money-lending business. In arriving at the figure of Rs. 176-10-6 the assessee deducted two sums, Rs. 511-12-6 and Rs. 808-4-6, said to have been paid to his two wives, Srirnagammal and Kaveri Ammal, respectively. The Income-tax Officer allowed a deduction in respect of the amount paid to Srirangmmal, but refused to allow a deduction in respect of the Rs. 808-4-6 paid to Kaveri Ammal, the senior wife. The assessee married Kaveri Ammal some years before 1922 when an account in her name was opened in the assessees books. From time to time moneys were paid into his account and interest was allowed on the balance in her favour. Section 16 (3) (a) (iii) provides that in computing the total income of an individual for the purpose of assessment there shall be included so much of the income of a wife as arises directly or indirectly from assets transferred directly or indirectly to her by the husband, otherwise than for adequate consideration or in connection with an ageement to live apart. This provision was inserted in Section 16th by the Indian Income-tax Amendment Act, 1937, Up to the time the amendment was made, the Income-tax authorities were content to treat the moneys standing in Kaveri Ammals account in the assessees books as her own moneys, but the amendment of the Act altered the position very materially. If these moneys had been received by the wife from her husband otherwise than for adequate consideration, the interest earned thereon became for the purposes of the Income-tax Act part of the husbands income.
The Income-tax authorities gave the assessee an opportunity of proving that The moneys were her own and had not come from him in a manner which would attract Section 16 (3) (a) (iii), but beyond stating that the moneys represented his wifes Stridhanam the assessee took no steps. Two of the sums appearing in the account admittedly represent gifts from him. When the case was before the Appellate Assistant Commissioner of Income-tax, the assessee stated that he had no evidence to prove that the moneys in the account represented sums received from her parents and not money set apart by the assessee in her name. As the Assistant Commissioner refused to interfere with the order of the Income-tax Officer, the assessee applied to the Commissioner to state a case to the Court on certain question which he regarded as being question of law.
On the 10th May 1940 the Commissioner wrote to the assessee pointing out the neither the Income-tax Officer, nor the Appellate Assistant Commissioner questioned the statement that he had given moneys to his wife or that she had become the absolute owner of the moneys so given but the reason for including interest thereon in the assessment made on him was that under the law as it stood the interest was to be treated as his income for the purposes of income-tax and reference was made to the amendment of Section 16 by the Amending Act of 1937. The letter concluded :-
'Your application for a reference to the High Court is presumably based on a misapprehension of the law on the subject. Will you please let me know whether in the light of the explanation now given, you wish to press the application for a reference to the High Court.'
In reply to this letter the assessee wrote to the Commissioner on the 24th May through his Advocate taking up the position that gifts by a husband to his wife constitute the wifes Stridhanam property and the income from such money was not taxable. In the course of this letter the assessee's Advocate observed :
'According to my clients case, the amounts consisted of various gifts by the husband to the wife on the occasion of the marriage and on other auspicious occasions and also those given by the parents and other relations which were all invested with several inums and they were collected and realised and constituted into a single fund in the year 1922. Under the circumstances it is wholly ultra vires and illegal to disallow the deduction of interest this year contrary to what has been going on consistently and uniformly from 1922 onwards.'
On the 25th June the Commissioner wrote to the assessees Advocate with reference to his letter of the 24th May. The Commissioner asked the assessee to produce such evidence as he could to prove that the amount not admitted to have been received the assessees wife from himself had actually been received from the parents or other relations as alleged. On the 3rd July the assessees advocate replied stating tat Commissioner would appreciate that on the construction placed by him on the section and its operation 'the question now sought to be clarified by you by production of evidence does not arise.'
The assessee took no steps to adduce evidence in support of his contention that his wife had received some of the moneys standing in her account in his books from her parents or other relations. Therefore the question which the Court is now called upon to decide is whether there are materials on the record on which the Income-tax Officer could lawfully treat Rs. 808 as representing interest on assets transferred by the assessee to his wife otherwise than for adquate consideration.
The position is this : The assessee has admitted that some of the moneys appearing in that account came from him and he has made no efforts to prove that some of the sums have come from other sources. In these circumstances it is impossible for the assessee to contend that there is no material on the record from which the Income-tax Officer could draw his conclusion. In fact, until the case came into this court the assessees contentions were based on a misconception of the law and it was only at the last moment that he raised the question which is now under reference.
It follows that we are of the opinion that the question referred should be answered in the affirmative, but before concluding we consider it necessary to deal with a statement made by the Commissioner to the effect that the natural presumption in the case of the assets of a married Hindu lady is that they are transferred to her by her husband out of love or affection. We do not agree that there is any such presumption. It is not an uncommon thing for husband to put money in the name of his wife without ever intending to give it t her. WE do no suggest that any moneys were put in the name of the assessees wife with ulterior motive, but it was incumbent upon him to show their source and this he has not done apart from his admission that some of them represented gifts from him.
As the assessee has failed he must pay the Commissioners costs Rs. 250.