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Showing contexts for: high denomination notes in S.N. Ganguly vs Commr. Of Income-Tax on 19 March, 1953Matching Fragments
1. The assessee in this case is Rai Bahadur S. N. Ganguli who owns two cinema houses in the town of Ranchi. He also is a partner in two firms, and holds a major part or shares in the United Motor Works, Ltd. He has invested money in several concerns, and owns Government securities and several house properties. For the assessment year 1947-43, Rai Bahadur S. N. Ganguli returned an income of Rs. 24,815/-. The Income-Tax Officer did not reject the account books produced by the assessee, but he added a sum of Rs. 15,000/-which was the amount of high, denomination notes encashed by the assessee on 19-1-1946, through the Ranchi Branch of the Bengal Central Bank, Ltd. The amount encashed was not mentioned in the books of account produced by the assessee. The Income-Tax Officer called upon the assessee to explain the source of the high, denomination notes. Not being satisfied with the explanation, the Income-Tax Officer treated the amount of Rs. 15,000/-as secreted profit of the assessee. The assessee appealed to the Appellate Commissioner; but the appeal was dismissed on 24-1-1949. A further appeal was taken by the assessee to the Income-Tax Appellate Tribunal. At this stage, the assessee's wife, Hemprabha Ganguli, filed an affidavit stating that a sum of Rs. 11,000 was encashed in her name on 19-1-1946, that this amount was her own property, and that she had an independent source of income apart from that of the assessee. This explanation was rejected by the Income-Tax Appellate Tribunal, and the appeal was dismissed on the finding that the entire amount of Rs. 15,000/. was secreted income in the hands of the assessee.
2. The Income-Tax Appellate Tribunal has formulated the following question of law for the opinion of the High Court :
"Whether there is any material to justify the assessment of Rs. 15,000/- representing the value of High Denomination Notes or any part of it as the income of the Assessee?"
3. In the approach to this question, it is necessary to bear in mind that the amount of Rs. 15,000/. is made up of two amounts of Rs. 11,000/- and Rs. 4,000/-, Rs. 11,000 teing the value of the high denomination notes encashed in the name of the assessee's wife & Rs. 4,000 being the value of the high denomination notes encashed in the name of the assessee. As regards the amount of Rs. 4,000/- which was the value of the high denomination notes encashed in the name of the assessee, we are of opinion that there was material to justify the action of the Income-tax authorities. In the first place, it has been found that the amount encashed finds no place in the books of account produced by the asses-see. It has been rightly pointed out by Mr. S. N. Dutt, who ably argued the case on behalf of the assessee, that the authorities have not disbelieved the books of account which the assessee produced. That circumstance, however, has no bearing on the question whether the amount of Rs. 4,000/-, which the assesses admittedly encashed on 19-1-1946, was secreted income.
There was an affidavit in this case filed on behalf of the wife that she had an independent source of income which was a house property in Ranchi alleged to fetch a rent of Rs. 70/- per month. The wife had also alleged in the affidavit that she had received presents in cash from relations which she had converted into high denomination notes for the sake of convenience. There is nothing to show that the Income-tax Appellate Tribunal rejected this explanation filed on behalf of the assessee. In any event, the onus of adducing evidence on the question was not upon the assessee, and no adverse inference ought to have been drawn by the Income-tax Appellate Tribunal against the assessee for this reason. In this connection, reference may be made to the decision of this High Court in --'Ram Kinkar Banerji v. Commissioner of Income-tax, B & O', AIR 1936 _Pat 267 (C). On the particular facts presented in this case, we are of opinion that there was no material before the Income-tax authorities to justify the assessment on Rs. 11,000/- which represented the value of high denomination notes encashed in the name of the assessee's wife, Hemprabha Ganguli.
5. In the result, we hold that there was no material before the Income-tax authorities to justify the assessment on Rs. 11,000/- representing the value of the high denomination notes encashed in the name of the assessee's wife, Hemprabha Ganguli. We also hold that there was material before the Income-tax authorities to justify the assessment on Rs. 4,000 representing the value of the high denomination notes encashed in the name of the assessee, Rai Bahadur S. N. Ganguli.
(6) We, accordingly, answer the question formulated by the Tribunal in the manner indicated above. There will not be any order as to costs of hearing of this reference.