SARKAR - (1.) THESE are two appeals arising out of two assessment or made under the Income-tax Act, 1922, respectively for the years 1945 and 1947-48. In each assessment case there was a reference of questions to the High court of Madhya Pradesh under section 66 of the and the present appeals are against the High court's answers tot] questions.
(2.) THE assessee is a trader carrying on two businesses, namely, (general merchandise) and bidis. He had also certain income from but with this income we are not concerned in these appeals. For each of assessment years concerned, the assessee had submitted a return but as accounts were not found complete and reliable, the Income-tax Officer assessed the gross profits of the businesses on the basis of certain percent of the total sales which had also to be fixed by estimates. No question in these appeals as to the correctness of these assessments. Subsequently, while dealing with the assessment for the year 1948 the Income-tax Officer noticed various credit entries in the assessee's of account which had all escaped his attention at the time of the for the years 1945-46 and 1947-48 earlier mentioned. These entries as follows: 3 JUDGEMENT_1_ITR50_1963Html1.htm The Income-tax Officer thereupon, with the sanction of the Commis of Income-tax, re-opened the assessments in respect of these years and after giving the assessee full opportunity to explain the nature of these made fresh assessments under section 34. In the fresh assessments added to the previously estimated incomes the said sum of Rs. 95,300.00 in of the year 1945-46 and the said sum of Rs. 39,575.00" respect of the 1947-48, as he was unable to accept the explanation offered by the assessee in support of his contention that the credit entries did not represent income. The assessee appealed against these fresh assessments to the Appellate Assistant Commissioner but the appeals were unsuccessful. He then appealed to the Income-tax tribunal. The tribunal found the assessee's explanation with .regard to the said entries for the amounts of Rs. 33,000.00 and Rs. 10,000.00 under the heads "Ghar Khata" and "Muhammad Islam Khata" respectively, acceptable and ordered their deletion from the assessment for the year 1945-46, but otherwise maintained the orders of the Income-tax Officer. Thereafter, under the orders of the High court under section 66(2) of the Act-made at the instance of the assessee, the tribunal framed six questions in-each of the assessment cases and referred them to the High court for its decision. The questions framed were identical in the two cases excepting as to one minor matter in question No. 6 which made no difference and the reference in the two cases were heard together. These questions were as weird by the High court against the assessee and hence, the present appeals by the assessee. As we have said, there were six questions in each case which were for all tactical purposes in identical terms and the questions in the two cases, therefore, need not be discussed separately. Of these six questions it is unassessary to deal with the first three, for two of these had been abandoned in the High court and the High court's answer to the third was not challenged in this court.
(3.) THE first question that arises for discussion is question No. 4, which was in these terms: 4 " Whether the burden of proving the source of the cash credits is o the assessee ? " It seems to us that the answer to this question must be in the affirmative and that is how it was answered by the High court. It is well establish that the onus of proving the source of a sum of money found to -have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it ounces is an inference of fact or a, inference of law ? " We confess we find it difficult to see the point of this question. Questions can be referred under section 66 of the Act when they are questions of law which arise out of the facts found by the tribunal and which the tribunal is said to have answered erroneously thereby unlawfully imposing a burden of tax on an assessee. On questions of fact, the tribunal is the final authority and such questions cannot be referred to a High court for its decision Now the present question assumes that the tribunal has made an inference Either that inference is one of fact or it is one of law. If it is of fact, not question with regard to it can be reread to the High court. If it is one of law, then a question whether the inference could in law be drawn might be referred to the High court. But the question whether the inference drawn by the tribunal is one of law or fact, which is the question her framed, is not a question which arises out of the decision of the tribunal nor one which the tribunal has at all answered. It does not seem to use ' that a question in this form can be referred under section 66. The High court, however, answered the question by saying that the inference was one of fact. If this is the correct view, then the matter ends there, for, as we have said, on questions' of fact the tribunal is the final authority. If on the other hand, the inference is one of law, then a question may have been referred to the High court as to whether the inference was justified in law. That was not done. We may, however, add that if the inference is treated as one of law, in our view, the tribunal had drawn it lawfully and this view would receive support from A. Govindarajulu Mudaliar's case. ;