Law: Income Tax Act, 1922

Section: 4,13

[Indian Income Tax Act, 1922 (XI of 1922)].........Sections 4, 13-Income-Undisclosed income-Cash credits-Burden of proof-Whether an the assessee-Held yes-Rejection of explanation of assessee-Whether finding against assessee fellows- Held no-Whether finding should be based on proper appraisal of evidence on record-Held yes, `Where there is an unexplained credit, it is open to the Income Tax officer to hold that it is the income of the assessee and no further burden lies on the Income fax Officer to show that that income is from any particular source. It for the assessee to prove that, even if the cash credit represents income, it is income from a source which has already been axe. Cases relied on :- CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 (SC), A. Govindarajulu Madaliar v. CIT [1958] 34 ITR 807 (SC) and Kule Khan Mohammad Hanif. CIT [1963] 50 ITR 1 (sc). In the present case, the Appellate Tribunal had considered that the explanation offered on behalf of the assessee in respect of the sum of Rs. 2 lakhs was probable and the contention on behalf of the revenue that there was no evidence to support it and that it was inconsistent with the evidence on record had to be rejected. Such a finding is really one of fact. It cannot he held that the Tribunal misdirected itself in its Ending. As observed by the Bombay High Court in the case of Commissioner of Income-tax v. Deviprasad Khandelwal and Co. Ltd. ([1971] 81 ITR 460), it cannot be said that, in every case where the Income Tax Officer rejects the explanation offered by the assessee, a finding against the assessee must be made. After the tax authorities reject the explanation submitted by the assessee, the further question that must always arise for decision would be, whether it could justly, in the facts and circumstances of the case, be held that the unexplained cash credit was the Income of the assessee. Case referred to : - CIT v. Devi Prasad Khandelwal and Ca. [1971] 81 ITR 460 (Bam). ORDER KANTAWALA C. J.- At the instance of the revenue the following two questions are referred for our determination under Section 66(2) of the Indian Income Tax Act, 1922 (hereinafter referred to as "the Act"): "…

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