5,00,000 in the name of Biswanath in Jamnagar branch of the Central Bank represented the companycealed pro fits of the assessee firm.
The respondent also acted as procuring agent for rice and paddy in certain areas for the Government of Bengal and received companymission on such procurements.
10,00,000 afforded to the respondent firm.
5,00,000 in fixed deposit in the name of Biswanath was that he had kept an amount of Rs.
5,00,000 was tendered to Central Bank Burrabazar Calcutta branch on November 15, 1944 for being transferred to,, Bombay head office.
5,00,000 each in fixed deposit in the names of Raghunath Prasad and Biswanath, was the companycealed profit of the respondent firm.
The head office of the, Bank issued demand draft No.
On November 2, 1944 an amount of Rs.
In the reference relating to question No.
5,00,000 in fixed deposit in the name of Biswanath was the companycealed income of the respondent for the relevant previous year.
The explanation furnished about the source of Rs.
5,00,000 in fixed deposit in the name of Biswanath, represented the companycealed income of the respondent firm.
9,50,000, out of the sum of Rs.
When war situation improved, the money was taken from Desh to Jamnagar for deposit.
The respondent was originally assessed on March 30, 1948 for the assessment year in question on the basis of an income of Rs.
Another amount of Rs.
In the appeal filed by the department, which related to the deletion of the sum of Rs.
Sen, N. R. Khaitan, O. P. Khaitan and B. P. Maheshwari, for the respondent.
5,00,000 in the name of Biswanath.
5,00,000 in the name of S. P. Agarwal did number represent the companycealed income of the assessee firm was justified in law.
5,00,000 deposited by each of them in Jamnagar branch belonged to them.
5,00,0001 standing in the name of Biswanath Gupta Bhuwalka representing the fixed deposit was the companycealed income of the assessee firm for the relevant year for the assessment year 1946 47.
Appeal by special leave from the judgment and order date April 1, 1966 of the Calcutta High Court in Income tax Refe rences Nos.
Applications were thereafter filed under section 66 2 of the Act in the High Court for directions to the Tribunal to refer certain additional questions to the High Court.
The answer to the later part of question No.
50,000 out of the fixed ,deposit of Rs.
In the appeal before us the learned Additional Solicitor General has taken us through the various orders which were made in the case and has companytended that there was relevant material before the Tribunal to hold that.
5,00,000 in fixed deposit in the name of Biswanath, the High Court held that there was numbermaterial before the Tribunal to hold that it was the companycealed income of the respondent for the relevant previous year for the assessment year 1946 47.
53 and 54 of 1961.
50,000/ out of the sum of Rs.
5,00,000 from Calcutta to Jamnagar for fixed deposit in the name of Band the use soon thereafter of the fixed deposit receipt as a security for overdraft, facility to the respondent firm did number justify the inference that the amount belonged to the respondent.
5,00,000 in fixed deposit in the name.
4,50,000 out of the above sum of Rs.
The Tribunal held that the amount of Rs.
5,00,000 in proceedings relating to his personal assessment was found to be incorrect.
5,00,000 was number paid to his heirs but was adjusted against the overdraft of the respondent firm.
The fixed deposit in the name of S. P. Agarwal was used as a security for overdraft facility to Shri Hanuman Sugar Mills Ltd., in the managing agency of which the partners of the respondent firm had companytrolling interest.
On November 24, 1944 the respondent firm opened an overdraft account with the Central Bank Calcutta for being operated up to a limit of Rs.
Two cross appeals were filed before the Income Tax Appellate Tribunal against the order of the Appellate Assistant Commissioner, one by the assessee and the other by the department.
5,00,000 on November 21, 1944.
4,50,000 out of Rs.
50,000 was withdrawn from Comilla Bank in March 1942.
5,00,000 sanding in the name of Raghunath Prasad was the companycealed income of the respondent firm for the relevant previous year for the assessment year 1946 47.
The Appellate Assistant Commissioner, therefore, reduced the addition in this respect by Rs.
The decision of the High Court in this respect is reported in 1967 64 I.T.R. 593 We have earlier mentioned that there was a third fixed deposit receipt of Rs 5,00,000 issued by the Central Bank Jamnagar branch in the name of S. P. Agarwal, son of Rameshwarlal, partner of the respondent firm.
1 that there was material before the Tribunal to hold that the sum of Rs.
5,00,000, while appeal No.
S. Nariman, Additional Solicitor General of India, B. Ahuja S. P. Nayar and R. N. Sachthey, for the appellant.
The approach of the Tribunal in this respect is manifestly erroneous because it is a companymon feature of companymercial and other transactions that securities are offered by other persons to guarantee the payment of the amount which may be found due from the principal debtor.
5,00,000 each from Calcutta to Bombay and thereafter to Jamnagar and the issue of fixed deposit receipts by the Bank in the name of the sons of the partners of the respondent firm.
The aforesaid appeal, No.
On the basis of that demand draft, a fixed deposit receipt was issued by the Jamnagar branch of the Central Bank on November 8, 1944 in the name of Raghunath Prasad.
As regards the other sum of Rs.
50,000, the Tribunal held, as per order dated July 29, 1960, that the sum of RS.
At first it was taken to be a clean overdraft without any security, but on investigation the Income Tax authorities found that the overdraft facility had been granted to the respondent on the basis of the companylateral security of the two fixed deposit receipts dated November 8, 1944 and November 21, 1944 issued by Jamnagar branch of the Bank in favour of Raghunath Prasad and Biswanath respectively.
Both Raghunath Prasad and Biswanath in their individual assessments for the assessment year 1947 48 claimed that the amount of Rs.
1 to the High Court Whether on the facts and in the.
10,00,000.
4,50,000 was stated to have been withdrawn by Biswanath from M s Soorajmal Nagarmal in January 1941, while the other amount of Rs.
2 was thus given in favour of the respondent firm.
5,00,000 had also been tendered in cash in the Burrabazar Calcutta branch of the Central Bank in October 1944 with instructions to remit the name to Jamnagar branch.
There was a third fixed deposit receipt of Rs.
In addition to that it did speculative business.
5,00,000 in the name of Biswanath, the High Court held that there was material before the tribunal to hold that the sum of Rs.
the Bank, to Jamnagar.
The Bombay head office of the Bank issued thereafter demand draft No.
5,00,000 in the name ,of Raghunath Prasad and the sum of Rs.
10,00,000 from the, Central Bank of India Ltd. hereinafter referred to as the Central Bank , Calcutta upon the security of two fixed deposit receipts of Rs.
I as well as to question No.
The other fixes deposit receipt was dated November 21, 1944 in the name of Biswanath Gupta B. N. Gupta , who is the same person as Biswanath Bhuwalka and is son of Bajranglal, partner of the respondent firm.
CA 1035/67, was dismissed by this Court as per judgment dated January 18, 1971.
5,00,0001 in the name of Biswanath Bhuwalka representing the fixed deposits were the companycealed income of the assessee firm for the relevant previous year for the assessment for the year 1946 47.
The judgment of this Court is reported in 1964 53 I.T.R. 575.
5,00,000 in fixed deposit in the name of Raghunath Prasad and Rs.
January 16, 1962, the High Court issued a direction to the Tribunal to draw a statement of case and refer the following question hereinafter mentioned as question No.
The transfer of the two amounts of Rs.
The Income Tax Officer thereafter examined the matter afresh and made reassessment.
1944 and thereafter was transferred through Bombay head office of.
1134 relates to the remaining sum of Rs.
5,00,000 on the Jamnagar branch of the Bank.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
No companysideration, was received by Raghunath Prasad and Biswanath for the accommodation that they extended to the respondent for giving their fixed deposit receipts in security for the overdraft facility.
The Judgment of the Court was delivered by KHANNA , J. This judgment would dispose of civil appeals No.
circumstances of the case, there was material before the Income Tax Appellate Tribunal to hold that the sum of Rs 5,00,000/ standing in the name of Raghunath Prasad Nopany and a sum of Rs.
Both these questions were answered in favour of the department.
On the basis of that demand draft, the Jamnagar branch of the Bank issued a fixed deposit receipt in favour of Biswanath for Rs.
was added to the total income of the respondent.
1 about the sum of Rs.
5,00,000 in fixed deposit in the name of Biswanath wag the companycealed income of the respondent firm.
Alhough the present appeals relate to the fixed deposit of Rs.
5,00,000 in fixed deposit in the name of Raghunath Prasad was the companycealed income of the respondent for the previous year in question.
He accordingly called upon the respondent to file return of income for the assessment year in question.
5,00,000.
50,000 also out of the amount of Rs.
10,00,000 ,on account of the two fixed deposit receipts.
Certain questions were thereafter referred under section 66 1 of the Act by the Tribunal to the High Court.
Letter of guarantee and letter of companytinuity were signed in that companynection by Raghunath Prasad and Biswanath on December 2.
50,000 out of the sum of Rs.
5,00,000 belonged to B, but whether it belonged to the respondent firm.
5,00,000 in fixed deposit in the name of Biswanath Gupta Bhuwalka was the companycealed income of the, respondent firm for the previous year companyresponding to the assessment year 1946 47.
On appeal, the income assessed was reduced to Rs.
50,000 in deposit with Comilla Bank.
1133 and 1134 of 1969 which have been filed by special leave by the Commissioner of Income Tax against the judgment of the Calcutta High Court in two references under section 66 of the Indian Income Tax Act, 1922 hereinafter referred to as the Act and the question which arises for determination is whether there was relevant material before the Income Tax Appellate tribunal to hold that the sum of Rs.
The names.
The appeal of the Commissioner was dismissed by this Court on March 26, 1964.
It may also be stated that in the reference which was made under section 66 i of the Act by the Tribunal to the High Court, the High Court as per judgment dated April 1, 1966, went into the question as to whether the income tax officer was justified in reopening the assessment under section 34 of the Act and whether on the facts and circumstances of the case, cash credits and fixed deposits in question were assessable for the assessment year 194647.
of the partners and their shares are given below Nandlal Bhuwalka /3/ Girdharilal Bhuwalka /3/ Shyamlal Bhuwalka /2/ Bajranglal Bhuwalka /2/ Bawatmal Nopany /3/ Ranieshwarlal Nopany /3/ The respondent was carrying on business as dealers and companymission agents in jute and other companymodities.
In response to that numberice, the respondent filed a return showing income in accordance with the original assessment as reduced in appeal, namely, Rs.
This explanation was found to be false in view of the admitted position that the amount of Rs.
1133 relates to the sum of Rs.
4,71,752.
It was found by the Income Tax Officer that the respondent had obtained overdraft to the extent of Its.
5,00,000 in fixed deposit in the name of S. P. Agarwal did number represent the companycealed income of the respondent firm.
2 to the High Court Whether on the facts and in the circumstances of the case, there was material before the Income Tax Tribunal to hold that the sum of Rs.
The present two appeals, as stated earlier, relate to the finding of the High Court that there was numbermaterial before the Tribunal to hold that the sum of Rs.
5,00,000 each in the Central Bank, Jamnagar branch One of those fixed deposit receipts was dated Novem ber 8, 1944 in the name of Raghunath Prasad Agarwal, who is the same person as Raghunath Prasad Nopany and is son of Rawatmal Nopany, partner of the respondent firm.
The respondent, it may be stated, filed an appeal in this Court to assail the finding of the High Court in answer to question No .
The Commissioner filed an appeal to this Court against the above order of the High Court.
5,00,000 in cash was tendered to the Burrabazar Calcutta branch of the Central Bank for being transferred to Bombay head office of the Bank.
4,28,448.
5,00,000 issued by Central Bank Jamnagar branch in the name, of S. P. Agarwal, son of Rameshwarlal, partner of the respondent firm, but we are number much companycerned with that receipt.
5,00,000 in the name of Biswanath, we may also set out them facts companycerning the fixed deposit receipt in the name of Raghunath Prasad in so far as they are essential for appreciating the point of companytroversy.
36 for the amount of Rs.
In the appeal filed by the assessee the Tribunal, as per order dated August 11, 1959/ December 15, 1959, agreed with the Appellate Assistant Commissioner that the fixed deposit receipt of Rs.
4,50,000 out of the fixed deposit of Rs.
By another order made on the same day, viz.,
4,50,000, out of a sum of Rs.
1133 and 1134 of 1969.
An application was filed by the Commissioner of Income Tax to refer the question to the High Court as to whether in the facts and circumstances of the case the inference of the Tribunal that the fixed deposit of Rs.
On February 19, 1955 the Income Tax Officer issued numberice under section 34 of the Act stating that he had reason to believe that the respondents income assessable to income tax had been under assessed.
10,00,000, companysisting of the two items of Rs.
The Tribunal rejected the application.
The Income Tax Officer held in the order of assessment dated February 20, 1958 made under section 34 read with section 23 of the Act that the amount of Rs.
This amount of Rs.
The Commissioner then applied to the High Court of Calcutta for an order calling upon the Tribunal to state a case and refer the above question to the High Court, The High Court rejected the application.
On appeal the Appellate Assistant Commissioner as per order dated May 12, 1958 held that the respondent firm had been able to explain the source of Rs.
The amount of Rs.
The assessee firm, who is the respondent inthese two appeals, is a registered firm companysisting of six partners.
4,28,448.
The Appellate Assistant Commissioner, however, maintained the addition to the total income of the respondent of Rs.
The High Court in this companynection took numbere of the fact that Raghunath Prasad died in August 1945 and after his death the amount of Rs.
Appeal No.
There were also,.
As per order dated January 16, 1962 the High Court directed the Tribunal to draw a statement of case and refer the following question hereinafter for sake of companyvenience mentioned as ,question No.
5,00,000 belonged to the respondent firm and that the Tribunal had taken into companysideration material which was number relevant to the issue.
50,000.
Jamnagar was at that time a ,part of the Indian princely State of Nawanagar.
of Biswanath in Jamnagar bank had been tendered at Burrabazar Calcutta branch of Central Bank on November.
10,00,000.
41 in favour of Biswanath B. N. Gupta on its Jamnagar branch.
5,00,000 was then transferred by Biswanath to his native place Ratangarh Desh in Rajasthan due to bombing panic in Calcutta.
4,50,000 with M s Soorajmal Nagarmal and Rs.
