Patna High Court
Sovaram Jokhiram vs Commissioner Of Income-Tax, Bihar & ... on 15 September, 1943
Equivalent citations: [1944]12ITR110(PATNA), AIR 1945 PATNA 79
JUDGMENT
MANOHAR LALL, J. - This is a reference by the Commissioner of Income-tax under Section 66(3), Indian Income-tax Act, 1922, for the opinion of the Court of the question which has been formulated as follows : "Whether in the circumstances of the case, the income from property, securities and money outstanding in the name of the wife of the assessee could be assessed to income-tax as part of the assessees income".
The facts may be briefly stated. Out of the assessable income of the assessee a sum of Rs. 6,254 was the interest shown in the books of the assessee as appertaining to a sum in a khata which stood in the name of his wife - this was claimed as a deduction in that it was alleged to have been paid to the wife or credited to her account in the khata. The Commissioner finds as a fact that this is merely a book entry and that the lady is not a creditor at all and no money as paid to her by way of interest in the previous year as claimed. Another item of Rs. 1,243 is an income from property acquired in the name of the wife in the calendar years 1935 and 1938 for a total sum of Rs. 19,500. This income arose and was derived in the previous year. The assessee objected to the inclusion of this sum in his assessable income. The Commissioner states that there is no evidence what so ever that the lay acquired this property from her own stridhan funds and therefore submits that the Department rightly treated this income as the income of the assessee.
It is argued by Mr. P. R. Das, who appears for the assessee, that the Commissioner is wrong in throwing the onus on the assessee to prove that the apparent state of things was not the real state of things. He argues that the amounts admittedly stand in the name of the wife in the books of the assessee which have been carried on from year to year for about 30 to 40 years, and that the property has been apparently acquired by her and that it was for the Income-tax Department to prove that she was not the owner of the property and that the sums in the Khata of the assessee did not belong to her. He relies on the case of Ramkinkar Banerji v. The Commissioner of Income-tax, Bihar & Orissa. Learned Counsel drew attention to the list of interest receipts to be found on pages 17, 18 and 19 and the assessment orders of the Income-tax Officer of 1934-35 and 1935-36. But these documents did not help him, as I pointed out in the course of argument. Document No. 6 shows that the Income-tax Officer disallowed three items which were claimed to have been paid to the wife of the assessee by way of interest although he allowed two items of Rs. 317 and Rs. 816 making a total of Rs. 1,133. Document No. 7 which is an assessment order dated the 28th February 1936 states that the lady has been assessed on this 1,133 rupees together with a sum of Rs. 899 which was included for the purpose of return. Apparently this was the income from securities upon which tax was deducted at the source. The documents for 1990 and 1991 and the other lists at pages 18 and 19 also show that the Income-tax Officers in these years allowed deduction to the assessee where they were satisfied that the amount were paid as interest to the wife of the assessee and disallowed the others where they were not satisfied as to these being genuine transactions. In my opinion it was open to the Income-tax Department to take this circumstance in consideration that for the previous years the assessee was refused the deduction on account of the interest appertaining to certain deposits as claimed. It is not clear whether any document of title stands for these sums in the name of the lady like a chitha or registered deed of sale or mortgage. What the assessee relies on is merely a book entry in the books of the assessee which may in certain circumstances be used as evidence against him. It cannot be used as an evidence in his favour. It was open to the assessee relies on is merely a book entry in the books of the assessee which may in certain circumstance be used as evidence against. It cannot be used as an evidence in his favour. It was open to the assessee to have produced an affidavit by the lady or a chitha showing sums due to the lady from assessees fund. In that case it would have been from the Income-tax Department to find out on evidence whether these documents were or were not true. But in the absence of any evidence on the record the Income-tax authorities had full jurisdiction to determine whether they should believe the mere statement in the books of the assessee that he was a debtor to the lady. The income-tax authorities had found in the previous year that these sums did not belong to the lady. It was then pointed out that the account books showed that the accounts were opened at least 20 years ago. But this was a matter which fell to be considered by the Tribunal of facts. The matter has been considered, but unfortunately for the assessee the facts found are against him. For these reasons I am of opinion that the sum of Rs. 6,264 being the total of items 1 to 6 at page 30 claimed as having been paid by way of interest to the wife of the assessee was rightly included in the assessable income of the assessee.
With regard to the sum of Rs. 1,253, however, the position is different, The Commissioner found that this is an income from the property which stands in the name of the lady and which was acquired in 1935 and in 1938 for Rs. 19,500. The documents of title are in the name of the lady. The onus in this case is upon the Department to show that the title was not with the lady, that she was not the owner and that she was merely a benamidars for the assessee and this is in accord with the view taken by this Court in the case relied on by Mr. P. R. Das. The income of Rs. 1,253 must, therefore, be deducted from the assessable income of the assessee.
For these reasons I would answers the question in these words : Items 1 to 6 making a total of Rs. 6,254 have been correctly taxed as the assessable income of the assessee. Item no. 7 of Rs. 1,253 has been incorrectly taxed and should be deducted from the assessable income of the assessee.
As the success in this Court has been divided, I would make no order for costs in this Court. The Commissioner is allowed to retain the sum of Rs. 100 deposited with him as cost of the reference to this Court.
CHATTERJI, J. - I agree.
Reference answered accordingly.