5,00,000 was number paid to the heirs of Raghunath Prasad Agarwalla, but it was adjusted against the over draft of the assessee.
On February 19,1955, the Income tax Officer, Central Circle VI, to whom the case was transferred by the Central Board of Revenue, issued a numberice under section 34 of the Act calling upon the firm to file a revised return of income for the companyresponding accounting year.
15,00,000 to its total assessable income and companypleted the reassessment.
14,50,000 out of the amount of Rs.
The order passed by the Appellate Assistant Commissioner was companyfirmed in appeal, in so far as it related to the two deposit receipts dated November 8, 1944, and November 21, 1944.
50,000 only, out of the fixed deposit of Rs.
The assessees books account showed a credit of Rs.
5,00,000 was tendered in cash to the Barabazar Branch of the Central Bank of India with instruction to transfer the same to the Bombay head office of the bank and a demand draft for the said amount was issued through the Bombay head office of the bank on its Jamnagar branch, which was at the material time situate in the territory of the Indian State of Nawanagar.
15,00,000 representing the three fixed deposit receipts in the names of the three sons of the three partners of the assessee as secreted profits.
5,00,000 in the account of Raghunath Prasad Agarwalla.
At all material times there were six partners of the firm.
Upon maturity the sum of Rs.
5,00,000 was tendered in cash in the Barabazar branch of the Central Bank of the Central Bank of India with instructions to transfer the same to the Bombay head office of the bank and a demand draft was issued from Bombay in the name of B. N. Gupta, son of Bajranglal Bhowalka a partner of the assessee on the Jamnagar branch of the bank and that with the aid of this amount a fixed deposit account was opened with the Central Bank of India, Jamnagar, on November 21,1944.
Although Raghunath Prasad Agarwalla had died in August, 1945, the account companytinued in the same name in the next year.
This deposit was later offered as security for overdraft facility granted to Sri Hanuman Sugar Mills Ltd., in the managing agency of which the partners of the assessee had a companytrolling interest.
In the view of the income tax officer the amounts of the fixed deposits receipts credited in the Jamnagar branch of the Central Bank of India in the names of the three sons of the partners of the assessee were secreted profits belonging to the assessee and on that view he added the sum of Rs.
5,64,970 was carried forward to the next year.
The Income tax Officer thereafter inspected the books of account of the assessee and found that on November 2,1944, an amount of Rs.
5 lakhs in the name of Sheo Prasad Agarwalla did number represent the companycealed income of the assessee firm was a question of fact number referable under section 66 1 of the Indian Income tax Act.
For the account year 2001 2002 Bikram Samvat September 27, 1944, to October 15, 1945 the firm was assessed in the assessment year 1946 47 by the Income tax Officer Non Companies cum E. P. T. Circle, under section 23 3 of the Indian Income tax Act.
5 lakhs in the names of S. P. Agarwalla did number represent the companycealed income of the assessee firm was justified in law.
The firm carried on business as dealers and companymission agents in jute, rice and other companymodities.
5,00,000 in the account of B. N. Gupta, but number in respect of the other deposits.
Out of the remittance a fixed deposit receipt was purchased in the name of Raghunath Prasad Agarwalla, son of Rawatmul Nopany, with the Jamnagar branch of the Central Bank of India on November 8, 1944.
The Income tax Officer also found that on November 15,1944, another amount of Rs.
The Commissioner of Income tax applied under section 66 1 of the Indian Income tax Act to the Income tax Appellate Tribunal to refer to the High Court of Calcutta the following question Whether in the facts and circumstances of this case the inference drawn by the Tribunal that the fixed deposit of Rs.
The Commissioner of Income tax then applied to the High Court of Calcutta for an order calling upon the Tribunal to state a case and refer it to the High Court.
The account of Raghunath Prasad Agarwalla in the assessees books showed a current account involving large sums of money and the balance of Rs.
They were Nandlal Bhowalka, Giridharilal Bhowalka, Shyamlal Bhowalka, Bajranlal Bhowalka, Rawatmal Nopany and Rameshwarlal Nopany.
On December 2,1944, a letter of guarantee and a letter of companytinuity signed by Raghunath Prasad Agarwalla and B. N. Gupta along with promissory numberes signed by the firm for keeping these two deposits under lien were lodged with the bank for securing over draft facilities for the assessee in the sum of Rs.
this Raghunath Prasad Agarwalla died on August 16, 1945, and the fixed deposit receipt matured on December 19,1945.
With special leave, the Commissioner of Income tax has appealed to this companyrt.
Shah, J. The respondent, Daulatram Rawatmal, is a firm registered under the Indian Income tax Act, 1922.
Pursuant to this numberice the firm filed a return showing an income of Rs.
2,75,168 according to its original assessment as reduced in appeal.
In appeal by the assessee the Appellate Assistant Commissioner of Income tax held that the assessee was able to explain the source of Rs.
Accordingly the Appellate Assistant Commissioner modified the order of the Income tax Officer and added an amount of Rs.
