Calcutta High Court
Amal Kumar Chakraborty vs Commissioner Of Income-Tax on 13 August, 1992
Equivalent citations: [1994]207ITR376(CAL)
JUDGMENT Ajit Sengupta, J.
1. In this reference under Section 256(1) of the Income-tax Act, 1961, the following questions of law have been referred to this court for the assessment year 1972-73 :
"1. Whether, on the facts and circumstances of the case, the Tribunal was justified in reversing the decision of the Commissioner of Income-tax (Appeals) and restoring the addition of a sum of Rs. 3,00,000 as income of the assessee from undisclosed sources ?
2. Whether, on the facts and the circumstances of the case, the Tribunal had material or evidence to take a decision on facts as well as on law contrary to the decision of the Commissioner of Income-tax (Appeals)?
3. Whether the Tribunal was right in its decision on the question of the applicability about the principles of res judicata and the principles of estoppel in the context of the present case ?
4. Whether, in view of the fact that filing of a return for the assessment year 1971-72 with a declaration disclosing the source of the sum of Rs. 3,30,000 is not in dispute, it was open to the Tribunal to hold that the return of the assessee showing the sum of Rs. 3,30,000 as exempted in the exemption column of the return for the assessment year 1971-72, was in fact yet to be established ?
5. Whether, in view of the fact that disciplinary proceedings and criminal cases are still continuing and are pending against the assessee and in view of the further fact that the assessee at the material time was just a low paid clerk in the Government of West Bengal at a total yearly salary of Rs. 850 on a charge of defalcation the Tribunal was justified in law in treating the sum of Rs. 3,30,000 as income of the assessee from undisclosed sources ?"
2. The facts leading to this reference are stated hereafter :
The Income-tax Officer, for the assessment year 1972-73, completed the assessment of the assessee under Section 143(3) read with Section 144B. He noted in the assessment order that the assessee filed a duplicate return of income on January 14, 1972, showing an income of Rs. 850 under the head "Salaries". It was stated before the Income-tax Officer that the original return was filed on February 20, 1973, for which receipt was produced. The Income-tax Officer further noted that the original assessment was made under Section 143(3) on March 31, 1975, on a total income of Rs. 3,27,850 which assessment was set aside, by the Commissioner of Income-tax in his revision order under Section 264 dated March 26, 1977, with a direction to the Income-tax Officer to make assessment according to law and after giving the assessee an opportunity of being heard. Accordingly, the Income-tax Officer took up the matter for fresh completion of assessment He examined the assessee under Section 131. After considering the different materials and facts gathered, the Income-tax Officer forwarded a draft assessment order to the assessee under Section 144B and, on receipt of the assessee's objection, the Income-tax Officer forwarded these documents to the Inspecting Assistant Commissioner of Income-tax as required under Section 144B. He pointed out that the original return filed by the assessee was destroyed by fire which took place in the Income-tax Office, Cooch Behar, on August 27, 1974, and as far as he gathered from his predecessor, the original return was filed in response to a notice under Section 139(2), as the assessee was found to have made investment in fixed deposits. The Income-tax Officer was of the view that the burden of proof squarely lies on the assessee under Section 69, which the assessee has not been able to discharge. He pointed out that, at the first instance, the assessee admitted that the fixed deposits were made by him in his name, vide the assessee's letter dated February 3, 1975. It was further noted that subsequently, in the course of the examination under Section 131, the assessee stated that he was not connected with these accounts in any manner. Later on, again, by his letter dated March 20, 1978, the assessee admitted the ownership of the money, but claimed that the receipt was of capital nature. The Income-tax Officer went on further to say that, in the next stage of examination under Section 131 on April 27, 1978, the assessee contended that the money was deposited with him by some smugglers from Bangladesh and that he was merely a custodian. It was submitted that he received the money from those smugglers as a custodian and later on, he became the owner of the money.
3. The Income-tax Officer, however, offered the assessee further opportunity to state his explanation in writing regarding the addition of fixed deposits of Rs. 3 lakhs and also in respect of other investments in the form of motor car and truck. The Income-tax Officer considered other investments in the form of motor car and truck and also in respect of another sum of Rs. 1,10,000 seized from the house of the assessee's mother-in-law. But, for the present reference application, we are concerned only with the first amount of Rs. 3 lakhs. The Income-tax Officer noted that, at a later stage, the assessee took for the first time the plea that Rs. 3 lakhs represented money received from East Pakistan before March 31, 1971, but nothing was noted about the source of the money, except that it was a capital receipt. It was also mentioned that the assessee, however, admitted that Rs. 3 lakhs belonged to him and that he was the legal owner of the same. He pointed out that no evidence was shown that the money was received before March 31, 1971.
4. Another plea was taken for the first time before the Income-tax Officer, vide the assessee's letter dated March 20, 1978, to the effect that the assessee submitted a return for the assessment year 1971-72, i.e., the assessment year preceding the year under reference, on October 12, 1971, in which the assessee claimed to have disclosed Rs. 3,30,000 in the exemption column of the return. It was further stated that the assessee filed a declaration on the same day stating that the entire money having been received from East Pakistan before March 31, 1971, was exempt from tax. The receipt was produced in respect of the point of filing of the return which was noted by the Income-tax Officer. The Income-tax Officer observed that even assuming that the assessee had filed a declaration and a return for the assessment year 1971-72 and the assessment for that year was barred by limitation, there was nothing to prevent the Income-tax Officer from making an assessment for the assessment year under consideration, on merits, as the fixed deposits were made in the financial year 1971-72. Before the Income-tax Officer, the assessee claimed to have received a letter from Md. Narul Islam of village and P. O. Sahaji Bazar, Dist. Mymen-singh, Bangladesh, which was produced to show that the deposits in cash were made by some friends coming from East Pakistan. The Income-tax Officer pointed out that the letter did not indicate from which place the same was written as the postal mark in the envelope was not clear. The Income-tax Officer took notice of the contradictory statement of the assessee as briefly pointed out above. It was also claimed before the Income-tax Officer that the assessee made fixed deposits after taking legal advice. The Income-tax Officer observed that the fixed deposits were made in fictitious names and fictitious addresses which could not show as to how the claim that the deposits were made after the legal advice and that too on the basis that the amount was not taxable at all He also noted that, if the amount was not taxable at all, then what was the necessity of disclosing the fixed deposits in the return for the assessment year 1971-72. The assessee stated before the Income-tax Officer that he was not aware of the contents of the declaration dated October 12, 1971, and, therefore, the Income-tax Officer inferred that it was not clear as to how the assessee could remember that he had disclosed this amount in the declaration. Apparently, no copy of the first declaration was kept with the assessee. The Income-tax Officer considered the claim that the receipt was of capital nature. He found that no receipt was furnished by the assessee in respect of the amount, nor was there any security in this respect. He, therefore, concluded that the assessee was not able to place anything on record to show that the money was received prior to April 1, 1971.
5. According to the Income-tax Officer, the filing of the return for the assessment year 1971-72 along with the declaration which was claimed to have been made on October 12, 1971, would not improve the case of the assessee. Accordingly, he added the amount as income of the assessee from undisclosed sources under Section 69.
6. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), before whom it was contended that the assessee had declared Rs. 3.30 lakhs in the return for the assessment year 1971-72 filed earlier, on which no decision was taken in so far as the said money declared in the return for the assessment year 1971-72 was concerned. It was, therefore, concluded that the same cannot be included in the assessment for the year under consideration. It was claimed that the Income-tax Officer has not brought any material to show that the above sum was the concealed income of the assessee which was added only on mere rejection of the assessee's explanation.
7. The Commissioner of Income-tax (Appeals) found force in the submissions made on behalf of the assessee that the Income-tax Officer apparently did not doubt the receipt in respect of filing of the return on October 12, 1971, for the assessment year 1971-72 and that the Income-tax Officer has not met this objection of the assessee. He was of the view that once the Income-tax Officer accepted that the return was filed, then such return cannot be ignored. He pointed out that the Income-tax Officer has merely bypassed the issue and proceeded to tax Rs. 3 lakhs on the basis of the deposits in the bank. The Commissioner of Income-tax (Appeals), therefore, considered that Rs. 3 lakhs cannot be included and on the facts of the case, he deleted the addition. He observed that the Income-tax Officer has merely rejected the explanation of the assessee without bringing material facts on record to show that the above amount was the income of the assessee, which he had not disclosed.
8. The Revenue brought the appeal before the Appellate Tribunal contending that sufficient material and facts have been brought on record, which the Income-tax Officer did take into account, in spite of the claim of the assessee to the contrary. The Revenue pointed out the different and contradictory statements made by the assessee from time to time. Even the authenticity of the letter alleged to have been received by the assessee from some Muslim friends was challenged. It was urged on behalf of the Revenue that the assessee has not been able to produce the party for verification and the claim of the assessee remained an assertion. It was pointed out that, in the alleged return, the amount was shown as exempt, but a copy of such return could not be furnished to the Income-tax Officer and, therefore, such statement cannot be accepted. Reference was made to the decision of the Supreme Court of India in the case of CIT v. Calcutta Agency Ltd. , with emphasis at page 197. Further, reliance was placed by the Revenue on the case law as reported in Sri Krishna v. CIT [1983] 142 ITR 618 (Cal) (sic), Manilal Gafoorbhai Shah v. CIT and Badri Pd. and Sons v. CIT , in order to stress that even the disclosure under the Voluntary Disclosure Scheme would not have the effect of converting the money into the income of the declarant, if it did not belong to the declarant. Reference was also made to another decision of the High Court in the case as reported in 120 ITR 518 (sic).
9. It was urged that the assessee has to show that, in the year 1971, the investment was made out of the taxed income and the assessee has failed to show that the money was with him prior to January 31, 1971. According to the assessee's learned counsel, it was merely an appreciation of facts and no complicated law point was involved. It was urged that the Department has taken a particular view while others also would be entitled to have a different view from a different angle. It was stressed on behalf of the assessee that the return for the assessment year 1971-72 constituted an evidence and the filing of the same was supported by a receipt and there was no obligation under the law for the assessee to produce a copy of the return or declaration as demanded by the Income-tax Officer. It was urged that the statement in the return and the declaration were valid, referring to the decision of the Supreme Court in the case as reported in CIT v. Bhikaji Dadabhai and Co. . In addition to the claim of filing of the return, it was also submitted that the Commissioner of Income-tax (Appeals) took judicial notice of the happenings in those days and had come to the correct conclusion after appreciating the facts and the claim of the assessee that the money was brought from the said party, which was also supported by the return for the assessment year 1971-72. It was also contended that even remittance from abroad cannot be treated as income of the assessee. According to the assessee's learned counsel, the Department had not established any nexus in the present case. The assessee's learned counsel also placed reliance on the decision in the case of CIT v. Ranchhoddas Karsondas , in which it was held that where, in respect of any year, the return has been voluntarily filed, the Income-tax Officer cannot ignore the same and any notice of the reassessment under Section 34 (old Income-tax Act), ignoring the said return, would be invalid. Further, reliance was placed on the decision of the Calcutta High Court in the case of Mohindra Mohan Sirkar v. ITO [1978] 112 ITR 47.
10. The Appellate Tribunal considered the lengthy submissions of both the sides and took notice of the findings of the authorities below. It was the view of the Appellate Tribunal that the ratio of the case-law cited on behalf of the assessee would not be applicable, as the facts of the present case were distinguishable. The Appellate Tribunal observed that the assessee's claim that the money was not taxable and that, in fact, his explanation for the different stands taken at different stages, remained only an assertion and a contention. The Appellate Tribunal also observed that, in taxation matters, there is no res judicata and the principle of estoppel cannot be invoked and that even assuming that the assessee has shown Rs. 3.30 lakhs as exempt in the return for the assessment year 1971-72, that would not mean that the Income-tax Officer has accepted that position, which fact was yet to be established. The Appellate Tribunal agreed with the contention of the Revenue that the Commissioner of Income-tax (Appeals) had merely accepted the submissions made before him. Reference was made to the decision in the case of CIT v. Durga Prasad . The Appellate Tribunal was of the view that the assessee has failed to establish various claims made by him at various stages and that apart, it was not known whether such declaration or such exemption was claimed in the exemption portion of the return, as no material to that effect was found, It also observed that assuming that such declaration was there, there were no nexus between the amount shown in the exemption portion for the assessment year 1971-72 and the fixed deposits made in the bank, particularly when the findings of the Income-tax Officer were that the fixed deposits were made during the financial year 1971-72, and, in fact, these findings have not been controverted.
11. Accordingly, the Appellate Tribunal, on the facts of the case was of the opinion that Rs. 3 lakhs were deleted wrongly by the Commissioner of Income-tax (Appeals). His order was, therefore, reversed and that of the Income-tax Officer was restored.
12. At the hearing before us, Mr. Sanjoy Bhattacharjee, learned advocate appearing for the assessee, contended that the Tribunal did not consider the questions involved in this reference in the proper perspective. According to him, it is necessary to consider the circumstances prevailing at the material time.
13. The burden of learned counsel's submission is that the Bangladesh liberation war is a factor that the Tribunal has excluded it from its consideration. He has sought to make out a case on the factual plane that some liberation volunteers crossed the border and entered the Indian territory and had liaison with their friends and relatives in India. The assessee is one such citizen of India with whom the liberation soldiers got friendly and entrusted the assessee with the sum of Rs. 3,00,000 to hold it in custody for them. Mr. Bhattacharjee's theory is that the said volunteers crossed the border, gave their money to the assessee and left after the cessation of hostilities for home, never turning up to reclaim their money. The entire story, though brilliantly put forth, hardly carries conviction because the assessee's own versions had been different at different points of time. The assessee alleges that he had filed a declaration as regards possession of this money on October 12, 1971, and the said declaration, according to his own statement, was to the effect that the money represented remittances from Bangladesh but not of income and it was a remittance of capital nature. As a matter of fact, in his letter dated March 20, 1978, which appears at page 83 of the paper book, he merely stated that the amount of Rs. 3 lakhs deposited in the bank is not a revenue receipt and the whole amount is purely a capital receipt. In his words :
"In my return for the assessment year 1971-72 filed on October 12, 1971, I, on advice, duly disclosed not only the amount of Rs. 3 lakhs but I disclosed in the said return a sum of Rs. 3,30,000 in the exemption column of the return claiming the same as exempt being capital receipt. In support of my claim for exemption, I separately submitted a declaration of the same date October 12, 1971, stating that the entire money having been received from East Pakistan (now Bangladesh) before March 31, 1971, was exempt from tax. It will be appreciated that I was an employee under the State Government of West Bengal. I had no business activity either in India or in East Pakistan during that relevant period and, therefore, whatever money was received by me from East Pakistan was received not by way of remittance of profit but by way of receipt of capital money."
14. Thus, even in March, 1978, the assessee presented the Officer with altogether a different story which is inconsistent with the facts now alleged by learned counsel. There was no whisper about the Bangladesh liberation fighters fraternising with the assessee and giving him the money to hold as their custodian. It was only in the deposition before the Income-tax Officer on May 24, 1978, in the course of assessment, that the assessee first gave out his story of the Bangladesh liberation army taking shelter under the assessee's cover and finally leaving the assessee after the cessation of the liberation war without reclaiming the money. Learned counsel for the assessee sought to persuade us to believe this story going by the proverb "facts are stranger than fiction". We have no hesitation to accept facts to be stranger than fiction. But what we need is that what is asserted is a fact. A fact is a state of reality which is proven and provable and if a state of reality is proved to exist, we would not object to its being stranger than fiction. But here what is being asserted can hardly be taken as a fact There is no evidence to support its truth. The mere ipsi dixit of the assessee or of learned counsel cannot be taken as a fact. Therefore, the question of its being taken to be stranger than fiction is also simply excluded. The liberation fighters of Bangladesh might or might not have entrusted the assessee with the sum of Rs. 3 lakhs as claimed by the assessee and we have nothing to rely upon except what the assessee asserted and that too only at a late stage. We could have reposed some reliance on the assertion, if the assessee's statement at various stages had not been inconsistent. It was for the first time on March 20, 1978, that the assessee claimed that he had submitted a return for the assessment year 1971-72 on October 12, 1971, and also filed a declaration on the same date stating that the entire money had been received by him from East Pakistan before March 31, 1971, and the receipts were capital and not remittance of profit. Till March 20, 1978, the money was claimed as remittance of capital from East Pakistan. The Bangladesh liberation and the fiction or the alleged fact of the Bangladesh volunteers entrusting the assessee with a large sum and finally leaving India without bothering the assessee with the demand for the return of the money is being trotted out only at the last stage.
15. Earlier, there had never been any claim, either, of a return for the assessment year 1971-72 having been filed in 1971 showing this amount by entry in the exemption column of the return. Even on February 25, 1975, in the course of examination under Section 131, the assessee totally disowned the bank accounts showing the deposit of Rs. 3 lakhs. He, at that stage, stated that he was not connected with these amounts in any manner, but he shifted his position. On March 20, 1978, in his letter as referred to, he first claimed that he had filed a return for the earlier assessment year disclosing the receipt of the money as capital receipt in the exemption column of the return. At the next stage on April 27, 1978, he trotted out the story of some smugglers getting on friendly terms with him and honouring him with the custody of the said sum of Rs. 3 lakhs. Now learned counsel is emphasising on the turbulent days of Bangladesh liberation movement and the infiltration of liberation fighters into Indian territory, making friends with the assessee and giving him custody of the sum of Rs. 3 lakhs without, however, reclaiming it on return after cessation of the war. Facts may be stranger than fiction but facts do not alter or falter as the assessee's claims do. Facts may be strange but never inconsistent or incongruent. The Supreme Court has held that human probabilities have also to be a guiding factor for getting at the truth as science has not invented any instrument as yet to find truth (see CIT v. Durga Prasad More [1971] 82 ITR 540). But what we are being urged to accept defies the basic perception of probabilities of any person of common judgment. We are not, therefore, swayed by what has been submitted on behalf of the assessee.
16. Learned counsel assails the Tribunal's order as one guided by suspicion and conjecture. He further emphasises that the Tribunal says that its conclusion is arrived at, having regard to the surrounding circumstances, while indeed it completely overlooks the actual surrounding circumstances. Such circumstances, according to learned counsel, consist primarily in the fact that the assessee was in possession of the amount at a time when the Bangladesh liberation movement was on. The other circumstance which he considers to be very tangible, is the assessee's claim of having filed a return for the earlier assessment, i.e., the assessment year 1971-72, relating to the previous year 1970-71 (financial year).
17. As for his first ground, we have already found that the Tribunal was quite right in not giving credit to the assessee's divergent statements at various stages. The assessee, in the first instance, says that he received remittances from East Pakistan, and the remittances were of capital nature. He next shifts to another statement that he was on intimate terms with some Pakistani smugglers who handed over to him the said sum of Rs. 3 lakhs and left the Indian territory without demanding the return of the money. Finally, he came out with a statement that he made a declaration of such possession of the money since 1970-71 and also filed a return making the entry to that effect in the "exemption" column claiming that the sum represented remittances of capital nature. There was no whisper till then about the smugglers fraternising and leaving largesse of Rs. 3 lakhs to the assessee. We are not concerned with the quaintness of the story of which the significance lies only in its incongruities. The incongruities only show that the inventiveness of the assessee was heightened from time to time and is climaxed by the Bangladesh liberation episode. It finally came out as the money of the Bangladesh liberation fighters who left it to the custody of the assessee and never caring to demand its return. We have already said that this story can go well only with willing suspension of the sense of reality. To this, learned counsel's reply is that facts are stranger than fiction. Given that the story could be strange yet true, we fail to reconcile, why the assessee in 1975 disowned the bank deposits, why he later came out with a statement that he had received it as a capital remittance from East Pakistan, how the factum of the filing of the return in 1971 pieces together with his statement in 1975 disowning the bank deposits. It is staggering that a man should claim to have filed a return in 1971 after having altogether disowned in 1975 the self-same bank deposits of which the source is alleged to have been disclosed in such return. In any case, the whole story is palpably false.
18. We are left in no manner of doubt that the claim of the assessee of his having filed a return for the earlier assessment year, i.e., 1971-72, disclosing therein the possession of this sum is also an artifice invented and crafted after 1975 for defeating the Revenue's attempt to assess the amount. It was later invented, secure in the knowledge that the records of the local income-tax office having been gutted in a fire set on by the mob in fury, there is no means for the Officer to call the bluff. This fire broke out in August 27, 1974. The timing of the assessee's claim regarding the filing of the return meaningfully comes only after that incident of fire and destruction of records in the fire. Therefore, the whole claim is spurious and not worth crediting.
19. The purpose of this claim is evident from the second line of argument taken by learned counsel. According to him, inasmuch as the Revenue has failed to dislodge the assessee's claim of having made a return with an entry claiming the receipt of remittance of capital exempt from tax, it remains no more open to the Assessing Officer to assess the assessee's investments by way of fixed deposits in the bank as the money declared earlier to be in his possession affords the source of the investment. He submitted that, in the absence of the records falsifying the assessee's claim, it should be taken as fully satisfactory not calling for any addition under the provisions of Section 69 of the Act. But learned counsel wants us to blink at the fact that, in 1975, the assessee completely disowned the investment by way of bank deposits. He then impugns the Income-tax Officer's jurisdiction to invoke the provisions of Section 69. According to him, unless the Officer could dislodge the assessee's claim of earlier disclosure of the said sum in the year relevant to the assessment year 1971-72, he cannot allege that the deposits in the bank are unexplained. Because, according to Mr. Bhattacharya, it is the same money disclosed in the return as the money received as capital remittance from Bangladeshi smugglers or from the Bangladesh liberation fighters which were deposited in the bank next year relevant to the assessment year 1972-73. The Income-tax Officer could proceed to assess the sums so deposited only in the assessment for the assessment year 1971-72, he argues ; but the Officer had not attended to the earlier return and the declaration as well as the entry in the return about this money. It was only in the assessment for that earlier year that he could have rejected the assessee's explanation and added the sum as unexplained. Even the Revenue cannot resort to Section 147 for the said assessment year 1971-72. To buttress his contentions, he has cited the decision of the Supreme Court in CIT v. Ranchhoddas Karsondas . There the Supreme Court held that once the assessee files a return, it is immaterial whether the return is one of income below the taxable limit. It becomes mandatory on the part of the Revenue to complete the proceedings in pursuance of such return. The Assessing Officer would be failing in his duty in not processing the same. The Supreme Court observed : "It is a little difficult to understand how the existence of a return can be ignored once it has been filed".
20. The Supreme Court further observed that (at page 575) : "He may show his income and the deductions and allowances he claims. But it may be that, on a correct processing, his income may be found to be above the exempted limit. No doubt, it is futile for a person not liable to tax to rush in with a return, but the return in law is not a mere scrap of paper. It is a return, such as the assessee considers, represents his true income".
21. The Supreme Court further has observed in the said decision that (at page 576): "There was nothing to prevent the Income-tax Officer from taking up the return and proceeding to assess the income of the assessee. It was open to him, if there was sufficient justification for it, to hold that the amount noted in the footnote was really the assessee's income in which case an assessable income would have been found and the tax could be charged thereon. If the Income-tax Officer had acted on that return and assessed the assessee before March 31, 1959, the assessment would have been valid".
22. The observations could avail, if the assessee's assertion as regards the filing of the return for the assessment year 1971-72 could be credible. Had he really filed the return, he would have claimed so in 1975 in his deposition. Further, he claimed in his letter dated March 20, 1978, that he had filed that return for 1971-72 on advice. It is not comprehensible why the tax adviser omitted to have a wealth-tax return filed inasmuch as the capital remittance though not income taxable is liable to wealth-tax. The assessee's claim has too many holes and missing links to be coherent and credible.
23. Learned counsel for the assessee relied upon a few other cases. We are not in disagreement with him on the fundamental principle that a return, whether showing taxable income or not, has got to be processed in the manner the law requires ; and, if not so processed within the time for completion of assessment, the Department's right to make reassessment forfeits. But that is not the relevant question here. Here the core of the matter is whether the claim of a return having been filed is proved to be true.
24. Learned counsel correctly argues that the alleged return for 1971-72 disclosing the possession of the said sum of Rs. 3 lakhs, not having been taken cognizance of and processed for assessment within the limitation for completion of such assessment, the Revenue cannot make amends by proceeding to assess the said sum on the basis of its deposit in the bank in the next year, provided however, the claim of the filing of the return is not spurious. Therefore, much turns on whether the assessee did file a return for the assessment year 1971-72.
25. We do not find that the principle of the law, as laid down by the Supreme Court, bears in any way on the issue. We also find that the assessee's claim of having filed a return is an after-thought a subterfuge to create a barrier to the Revenue's attempt to tax the deposits. The admitted position is that the deposits were made in the bank in the financial year 1971-72 relevant to the assessment year 1972-73. The assessment year for which the income has been assessed is the assessment year 1972-73. The questions of law referred to us for our opinion also arises from the said assessment in respect of assessment year 1972-73. We fail to appreciate learned counsel's argument that the Income-tax Officer was barred from making the assessment on the basis of the investments that came to light. We fail to appreciate why one should chase a wild goose--a return which is alleged to have been filed showing the remittance in 1971, while in 1975, the assessee altogether disowned the deposits. Even if there were a return for 1971-72 disclosing the alleged remittance or possession of money of Bangladeshi smugglers or Bangladesh liberation fighters, that money has no nexus with the bank deposits. The assessee would not have disowned the bank deposits in 1975. If we go by the episode of Bangladeshi smugglers or liberation fighters hosted by the assessee, they would have retrieved their money. Another missing link in the assessee's story meant to be circumstantial evidence is the fact that the assessee did not file a wealth-tax return even while acting on the advice of tax experts.
26. Here, we are to go by the dictum "falsus in uno falsus in omnibus". Though applicable in criminal law, it is a sound principle to apply in taxation when the matter is one of finding of fact on the basis of statements of a witness and their judicial evaluation. It is seen that in 1975, the assessee gave a false statement by stating that he had no connection with the bank deposits. Later he makes a volte face and says that the deposits are from the money supposedly declared in 1971. Therefore, the later statements of the assessee cannot be credited as the source of the deposits.
27. Moreover, even if a return was really filed and an entry made in the exemption column showing it as a capital remittance from East Pakistan, that entry is repudiated at the final stage by the assessee himself since his ultimate averment is that it was not capital remittance from East Pakistan but money kept in his custody by persons of Bangladeshi origin. Therefore, this falsifies the entry, as alleged in the return supposedly filed by the assessee. That entry, if it were there together with a return containing it, has no more any value, because the assessee himself has repudiated its nexus with the bank deposits by disowning the very deposits in 1975. Again, if we accept the assessee's latest statement that the money was placed in his custody by liberation fighters from Bangladesh, we have also to presume in the common course of ordinary happening that the said liberation fighters took back the money. The money in the bank is different money, first disowned and now owned up by the assessee. The assessee no doubt produced a receipt showing that he had filed a return, but this can as well be a mere contrivance because it does not fit in anywhere in the incongruous positions taken by the assessee from time to time and his divergent statements including the assertions made on his behalf by learned counsel. The assessee's version is that the owners of the money were smugglers and some criminals in his words "mastans" while learned counsel glamourises them as liberation fighters with no attachment for money.
28. Thus, we visualise no bar to assessing the bank deposits on the merits of the case on the factual plane which is the all-important factor here. We find that the entire case as argued for and on behalf of the assessee is based on the ipse dixit without an iota of any tangible merit.
29. The fact that there are charges in departmental and criminal proceedings against the assessee pending is also a circumstance that has a bearing and is a supplementary factor for the prima facie case that, the assessee, a low paid servant of the State Government, had, in the absence of other proven sources, derived the amount invested as bank deposits from a source concealed and not disclosed to the Department.
30. The Tribunal is also correct in holding that, since there is no res judicata in taxation matters, the bank deposits could be investigated even if the assessee had, in fact, filed a return for the assessment year 1971-72. The truth of the assessee's claim of receipt of remittance in the financial year 1970-71 relevant to the assessment year 1971-72 is open to a probe and the availability of the past fund as a source is intertwined with such probe and calls for scrutiny. If there were a return for the assessment year 1971-72, that could at most be evidence of non-income receipt but its availability is open to question as a source for investment next year. In the absence of a wealth-tax return showing all assets and liabilities on the valuation date, the last day of the previous year, i.e., March 31, 1971, nothing remains to afford a nexus of the investment with that source. This position emerges even if we agree to put on blinkers at the improbabilities, contradictions and incoherence of the assessee's assertions.
31. Supposing the Revenue accepted the return allegedly filed for the assessment year 1971-72, it makes no difference to this position. That does not estop the Revenue to go into the rationality or materiality in adjudging the source of investment in a later year. The ratio in CIT v. Durga Prasad More relied upon does not match the facts in the case. Unlike that case, the Revenue has not treated the same matter on the same set of facts differently in different years.
32. In the premises, we answer all the questions in the affirmative, and in favour of the Revenue.
33. There will be, no order as to costs.
K.M. Yusuf, J.
I agree.