Law: Income Tax Act, 1922

Section: 66(2),66(1)

Income-tax Act, 1922 -- Section 66(1), 66(2) -- Cash credits -- Income from undisclosed source -- Reference -- Question of law or fact -- Tribunal's finding that cash credits represented income from undisclosed source -- Finding based on enough material on record -- Finding, whether gives rise to question of law -- Held no -- Question whether applicant has established that amount invested by him was the sale proceeds of jewellery or was his earning from undisclosed source -- Whether a question of fact -- Held yes - JUDGMENT The judgment of the court was delivered by KHAMISANI J. -This is an application under Section 66(2) of the Income-tax Act in which a prayer for a direction to the Income-tax Appellate Tribunal for referring to us the following questions of law arising out of their order has been made: 1. Whether the finding of the Income-tax Appellate Tribunal was based on any material that the sum of Rs. 71,385 represented income of the assessee from his business activity carried on in Pakistan in the relevant year? 2. Whether there was any evidence on the record for the finding of the Tribunal that the assessee carried on business during the relevant period and earned as profit the disputed item in Pakistan? It arises out of the following facts. 2. Haji Adam Noor Muhammad., the assessee, made a start with the setting up of a business of re-rolling factory in the account year ending on the 31st of December, 1954 (corresponding to assessment year 1955-56). Actually the working of the factory started in the subsequent year. He produced his personal account which showed the credits of Rs.12,054 on 1st of January, 1954, Rs.38,792 on 7th of June, 1954 and Rs.32,593 on 19th of June, 1954. The credit of Rs.12,054 having been shown on the 1st of January, 1954 was not taken into account as this related to the earnings of the previous account year. The remaining two credits totalling to Rs.71,385 were considered by the Income-tax Officer for the purpose of assessing the applicant to tax. The applicant was called upon to explain these credits. His explanation initially was that these amounts were the sale proceeds of the jewellery brought by him from Nairobi and sold…

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