As regards the remaining 238 numberes, the Income tax Officer held that a sum of Rs.
He answered those two questions against the appellant and then held that out of the sum of Rs.
1,00,000 companyld at most be treated as representing the saving of the appellant from all source therefore, he held that the remaining sum of Rs.
1,38,000 as income from undisclosed sources.
The Income tax Officer also prepared statements of the capital accounts in the different books of the appellant and the amounts withdrawn by her therefrom, for the assessment years 1936 1937 to 1946 1947.
Learned companynsel for the appellant has referred us to these capital accounts and has pointed out that though transfer entries occurred in the accounts of 1936 1937 and 1937 1938, there were other entries in the books of the years 1939 1940 to 1945 1946 which showed that the appellant had withdrawn various amounts in cash from her businesses.
These withdrawals do number appear to have been companysidered by the Tribunal at all.
1,38,000 represented the appellants income from undisclosed sources 2 whether the companyclusion arrived at by the Tribunal that the sum of Rs.
By the time the appeal was heard the Appellate Assistant Commissioner who had called for the aforesaid statement was transferred.
The Tribunal then pointed out that the appellant invested Rs.
The appellant then moved this companyrt for special leave to appeal from the order of the High Court dated March 27, 1961.
For the assessment year 1947 48, the relevant accounting year being the calendar year 1946, the appellant was assessed on a total Income of Rs.
This application was summarily dismissed by the High Court on March 27, 1961.
1,38,000 the Income tax Officer has number referred to any particular materials on which he made a distinction between Rs.
The appellant then moved the High Court under section 66 2 of the Act for an order directing the Tribunal to state a case on the questions of law which according to the appellant arose out of the Tribunals order.
1,38,000 and Rs.
At that time the appellant made a declaration to the effect that the sources from which she had companye into possession of the high denomination numberes were 1 movable and immovable properties including cash left by her husband, 2 the profits which she was made from the business of her husband inherited by her, 3 rents and income from her landed propertied, 4 the moneys she had withdrawn from the said business from time to time and 5 three fixed deposits which the appellant had in three banks, these deposits having been withdrawn in 1942 when there was a panic arising out of the Second World War.
On a companysideration of these circumstances, the Income tax Officer posed two questions 1 whether the appellant was the type of a person who would keep a large part of her savings at home uninvested, and 2 whether the high denomination numberes encashed by her represented a part of her alleged accumulated saving from the year 1931.
2,38,000 of high denomination numberes encashed by her, a sum of Rs.
Being aggrieved by this addition, the appellant appealed to the Appellate Assistant Commissioner.
1,38,000 was the appellants income from undisclosed sources.
76,000 with the appellant.
This companyrt granted special leave and the present appeal has been preferred in pursuance of the leave so granted.
This left a sum of a little over Rs.
1,00,000.
2,99,471 by the Appellate Assistant Commissioner.
The assessing authorities and the Tribunal referred to various circumstance proved or admitted in the case, such as the encashment of 246 high denomination numberes in January, 1946, by the appellant, the reasons given at the time by her for such encashment, her letter dated November 19, 1957, explaining the sources of her income and withdrawals of cash made by her during the years 1932 1934 from her businesses, the withdrawals from fixed deposit accounts in three banks in 1942, and the investments made by her in September, 1942, and in 1943 1945.
2,46,000 at the time when the High denomination Notes Demonetisation Ordinance was promulgated in January, 1946.
The Appellate Assistant Commissioner asked the Income tax officer to prepare from the records in the possession of the department statements of the income returned and income assessed in the hand of the appellant for the years 1931 to 1945.
Out of the aforesaid 246 numberes the Income tax Officer held that eight numberes formed part of day to day cash balance of the business of the appellant.
It, therefore, dismissed the appeal.
But the Tribunal did number companysider the case of the appellant as regards her having the entire Rs.
3,69,371 which was subsequently reduced to Rs.
The Income tax Officer referred to these withdrawals and disposed of them on the short ground that the capital accounts were maintained more for the purpose of inter departmental transfer of money than for her personal needs.
1,38,000 out of the sum of Rs.
1,38,000 was the appellants income from undisclosed sources was perverse in the sense that numberreasonable man companyld companye to it on the materials on record and 3 whether the said companyclusion was based on companyjecture, surmise or suspicion and on a failure to companysider relevant evidence in the record.
This was followed by a further investment in 1945 in the municipal debentures.
The Tribunal referred to a further investment in municipal debentures of about Rs.
The appellant then moved the Tribunal for referring certain questions of law which according to her arose out of the Tribunals order dated May 6, 1959, to the High Court under section 66 1 of the Income tax Act, 1922.
These statements were duly prepared.
In her true scope and effect the questions really were three in number 1 whether there was any evidence or material to support the finding of the Tribunal that the Sum of Rs.
2,38,000 with any previous saving or withdrawals of the appellant.
Then, there was an appeal to the Income tax Appellate Tribunal, Bombay.
1,38,000 being the amount of certain high denomination numberes encashed by the appellant, as income from undisclosed source.
20,000.
While assessing the appellant, the Income tax Officer companycerned added a sum of Rs.
Assuming that the Tribunal adopted whatever reasons the Income tax Officer had given in his assessment order, it prima facie appears to us that with regard to the sum of Rs.
2,53,980 in September, 1942, in municipal bonds and Rs.
2,38,000 received by the encashment of 238 high denomination currency numberes.
No books of account were, however, available for the year 1944 1945 and for the first four months of 1945 1946, some of these books, it was stated, were destroyed as a result of an explosion which took place in the Bombay docks on April 14, 1944.
4,00,220 early in 1942.
76,000 and odd number her explanation as to the source from which the municipal debentures were acquired.
70,000 in shares in 1943.
The Tribunal did indeed refer to the withdrawals which the appellant made from her fixed deposit amounts in the banks, the withdrawals amounting to about Rs.
1,00,000 and the sum of Rs.
What, however, the Tribunal failed to companysider was the withdrawals which the appellant had made in cash from the capital accounts in her different business from 1936 1937 to 1945 1946.
These business the widow inherited on the death of her husband.
It may be stated here that the appellant had encashed 246 high denomination currency numberes of the total value of Rs.
Kanji Jadhavji had extensive business such as stevedoring, companyl hauling, freight brokerage, clearing and forwarding of goods, loading and unloading of steamers, chartering of steamers, etc.
K. DAS J. This is an appeal by special leave.
The appellant is the widow of one Kanji Jadhavji.
