S N GANGULY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(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 :