8,500 were received by them on 8th January 1946 from Manihen, widow of Shah Maneklal Nihalchand.
8,000 on 8th January 1946, thus aggregating to Rs.
There was a cash balance of Rs.
After examining the entries in the books of account of the appellants and the position of the Cash Balances on various dates from 20th December 1945 to 18th January 1946 and the nature and extent of the receipts and payments during the relevant period, the Income tax Officer came to the companyclusion that in order to sustain the companytention of the appellants he would have to presume that there were 18 high denomination numberes of Rs.
1,000 was received by the appellants in high denomination numberes, which was almost impossible.
The Tribunal companyld number say that the appellants bad numberhigh denomination numberes with them.
On a petition made by the appellants for leave to appeal to this companyrt, the High Court granted a certificate that this was a fit case for appeal to this companyrt and hence this appeal.
He, therefore, added the sum of Rs.
61,000 to the assessable income of the appellants from undisclosed sources.
8,500 in 1,000 rupees currency numberes making Rs.
The reference was heard by the High Court and the High Court answered the first referred question in the affirmative, but did number answer the second referred question.
1,000 each in the Cash Balance on 1st January 1946 and that all cash receipts after 1st January 1946 and before 13th January 1946 were received in currency numberes of Rs.
1,000 each, included in their cash balance of Rs.
1,000 currency numberes on 28th December 1945, Govindprasad Ramjivan Nivetia, proprietor of Messrs Shusiko Textiles, in regard to payment to the appellants of a sum of Rs.
1,000.
1,000 and were thus capable of having been paid to the appellants in high denomination numberes of Rs.
1,000 each, which they encashed on 18th January 1946 through the Eastern Bank.
20,000 were received from the Anand Textiles, and there was an opening balance of Rs.
20,000 in Rs.
As regards the second referred question, the High Court held that question was number raised by the appellants in their application for reference under section 66 1 of the Act and, therefore, it bad numberjurisdiction to ask the Tribunal to state a case on a particular question of law, where the appellants themselves had never asked the Tribunal to refer such a question to the High Court and that even though it had directed the Tribunal under section 66 2 to refer the said question, as it had numberjurisdiction to ask the Tribunal to refer the said question, it was number open to it to answer the second question which had been raised by the Tribunal at its instance and refused to answer it.
It accepted the books of account of the appellants but thought that the cash balance on 18th January 1946 companyld number have sixtyone high denomination numberes.
The appellants received thereafter as shown in their cash book several sums of monies aggregating to over Rs.
Appeal from the judgment and order dated the 10th March 1953 of the Bombay High Court in Income tax Reference No.
The appellants applied to the Tribunal for stating a case and referring the first question of law to the High Court for its opinion under section 66 1 of the Act.
1,000 and these 61 currency numberes of Rs.
1,000, which companyld account for 45 other numberes of that high denomination, thus making up 63 currency numberes of the high denomination of Rs.
On appeal to the Appellate Assistant Commissioner the appellants produced before him affidavits of three persons to show that the appellants had received Rs.
The High Court observed that it was impossible to say that the inference drawn by the Tribunal from the circumstances was an unreasonable inference or an arbitrary and capricious inference or an inference which numberjudicial tribunal companyld ever draw.
Various other sums were also received by the appellants from 2nd January 1946 up to and inclusive of 1 1 th January 1946, which were either multiples of Rs.
15,000 in Rs.
The appellants thereupon applied to the High Court under section 66 2 of the Act for an order directing the Tribunal to state a case and refer the questions set out in the application.
13000, which they encashed through the Eastern Bank, on 18th January 1946.
20,000 in 1,000 rupees currency numberes on 28th December 1945, Rs.
which they made involved taking into account all payments received by the appellants from and after 2nd January 1946, which were either multiples of Rs.
The calculations.,
The appellants were number in a position to give further particulars of Rs.
15,000 in 1,000 rupees currency numberes on 6th January 1946 and Rs.
1,000 each, which the appellants encashed on 18th January 1946 companyld as well have been in their custody on 12th January 1946.
In stating the case and referring the said questions of law to the High Court, the Tribunal pointed out that the second question was number urged before the Tribunal at any stage and hence it was number dealt with by it in its original order.
The cash book entries from 20th December 1945 up to 18th January 1946 were put in before the Income tax Officer and they showed that on 28th December 1945 Rs.
The High Court held that there were materials before the Tribunal to hold that the sum of Rs.
69,891 2 6, the 61 high denomination currency numberes of Rs.
1,000 or were over Rs.
Both the Income tax Officer and the Appellate Assistant Commissioner discounted this suggestion of the appellants by holding that it was impossible that the appellants had on hand on 12th January 1946, the 61 high denomination currency numberes of Rs.
1,000 currency numberes received by them during the relevant period, as they were number in the habit of numbering these particulars in their cash book and therefore relied upon the position as it companyld be spelt out of the entries in their cash book companypled with these affidavits in order to show that on 12th January 1946 they had in their cash balance of Rs.
An appeal was taken by the appellants before the Income tax Appellate Tribunal.
1,000 currency numberes on 8th January 1946.
The High Court directed the Tribunal to state a case and refer the two questions of law set out hereinabove to it for its decision under section 66 2 of the Act.
69,891 2 6.
It, therefore, answered the first referred question in the affirmative.
The appellants further sought to support their companytention by procuring before the Appellate Assistant Commissioner the affidavits of Kuthpady Shyama Shetty, General Manager of Messrs Shree Anand Textiles, in regard to payment to the appellant is of a sum of Rs.
81 of 1954.
The Tribunal rejected the said application holding that numberquestion of law arose from its order.
1,000 each.
It came to the companyclusion that the appellants appeared to have put in high denomination numberes in the cash balance and taken the other numberes away.
CIVIL APPELLATE, JURISDICTION Civil Appeal No.
1,000 each, a presumption which he found impossible to make in the absence of any evidence.
35 of 1952.
This was, however, companysidered impossible by both the Income tax Officer and the Appellate Assistant Commissioner as they companyld number companysider it within the bounds of possibility that each and every .payment received by the appellants after 2nd January 1946 in multiples of Rs.
BHAGWATI J. Two questions were referred by the Income tax Appellate Tribunal to the High Court of Bombay under section 66 1 of the Indian Income tax Act.
30,000 represented the income of the appellants from undisclosed sources and that the finding of the Tribunal was a finding of fact based on materials before it and even if it was an inference drawn by the Tribunal, the inference was based on the facts and materials before the Tribunal.
43,500 during the relevant period.
The Appellate, Assistant Commissioner did number accept the statements companytained in the said affidavits and dismissed the appeal and companyfirmed the order of the Income tax Officer.
The books of account of the appellants were accepted by the Income tax Officer and the only scrutiny made by the Income tax Officer was whether at the relevant date, i.e. on 12th January 1946, the appellants had in their cash 61 notes of high denomination of Rs.
1,000.
The following Judgments were delivered.
This was done in the calendar year 1946 being the account year companyresponding with assessment year 1947 48.
It was by reason of their visualisation of such an impossibility that they negatived the appellants companytention.
18,395 on 2nd January 1946.
N. Joshi, Porus A. Mehta and R. H. Dhebar for the respondent.
The High Court answered the first question in the affirmative but refused to answer the second question, being of the opinion that even though it had asked the Tribunal to refer that question under section 66 2 of the Act, it had numberjurisdiction to do so inasmuch as the appellants had number asked the Tribunal to refer the second question and, therefore, numberquestion arose of the Tribunal refusing to raise that question or to submit it for the decision of the High Court.
The Tribunal after taking into companysideration all the materials which bad been placed before the Appellate Assistant Commissioner, including the said affidavits, was of the opinion that if it was to accept the appellants companytention, it would mean that practically every payment above Rs.
J. Kolah and I. N. Shroff for the appellant.
8,500 Rs.
During the assessment proceedings for the year 1947 48 the Income tax Officer called upon the appellant to prove from whom and when the said high denomination numberes of Rs.
8,000 thereout being in Rs.
The appellants area partnership firm doing business in Mill Stores at Ahmedabad.
15,000 were received by the appellants on 7th January 1946 from the Sushico Textiles and Rs.
It accepted the appellants explanation only in regard to 31 numberes and directed that the appellants assessment for the year under reference be reduced by that amount and dismissed the rest of the appeal.
1,000 currency numberes on 6th January 1946 and Bai Maniben, widow of Shah Maneklal Nihalchand, in regard to payment to the appellants of a sum of Rs.
Pursuant to clause 6 of the Ordinance the appellants on 18th January 1946 encashed high denomination numberes of Rs.
May 10.
The Governor General on 12th January 1946 promulgated the High Denomination Bank Notes Demonetisation Ordinance, 1946 and High Denomination Bank Notes ceased to be legal tender on the expiry of 12th day of January 1946.
1,000 or were over Rs.
61,000 were received by the appellants and also the bona fides of the previous owners thereof.
