Shah, J. - (1.) Durga Prasad More--hereinafter called "the assessee"--was assessed by the Income-tax Officer, Calcutta, to tax under the Income Tax Act, 1922, in the assessment year 1945-46 in the status of individual resident and ordinarily resident in British India. In proceedings for reassessment of the income of the assessee, the Income-tax Officer added to the total income of the assessee for the assessment year 1945-46 an amount of Rs. 2,20,000 remitted from Nawalgarh in Rajasthan--then without British India--by three demand drafts to Calcutta in the months of February and March, 1944. The plea of the assessee that the three demand drafts represented the assessees cash balance which was sent from Calcutta in November, 1941, and was brought back in the months of February and March, 1944, was disbelieved. The order of the Income-tax Officer was affirmed by the Appellate Assistant Commissioner and by the Income-tax Appellate Tribunal, Calcutta Bench A. The High Court of Calcutta answered the following questions :"(1) Whether there was any evidence on record to sustain the finding of the Tribunal that the said sum of Rs. 2,20,000 remitted from Nawalgarh to Calcutta during the year of account constituted income from some undisclosed sources (2) Whether the Tribunal was entitled to reject the evidence on behalf of the assessee on mere scepticism instead of any tangible evidence to support its findings -
(2.) Submitted by the Tribunal under Section 66(2) of the Income Tax Act, 1922, in the negative. The Commissioner of Income-tax has appealed to this court against the order of the High Court on the first question. The High Court recorded their answer on the second question in favour of the Commissioner and no appeal has been filed by the assessee against that order, and nothing more need be said in this appeal in that behalf.
(3.) Before the Income-tax Officer the assessee had contended that he had in November, 1941, a large cash balance in his Calcutta business and out of that balance he had transferred Rs. 3,00,000 to Nawalgarh. The reasons for the transfer according to the assessee were: (1) that there was a scare of Japanese invasion; and (2) that proceedings for recovery of a large amount of tax due by the firm of Messrs. Ram Sahaymal More--an unregistered firm--which the assessee was a partner were initiated by the income-tax authorities in the year 1941. The Income-tax Officer on a review of the evidence disbelieved the plea of the assessee and observed that "in the circumstances of the case, the three amounts aggregating to Rs. 2,20,000 not recorded in Calcutta books of account" represented "profits of undisclosed business activity in British India", and were on that account liable to be taxed as income of the assessee in the assessment year 1948. The order of the Income-tax Officer was affirmed by the Appellate Assistant Commissioner. He observed : "As the assessee has failed to discharge the onus of proving satisfactorily that the remittances formed really a part of the cash balance as shown in the Calcutta account, the Income-tax Officer was perfectly justified in treating the sum of Rs. 2,20,000 as income from undisclosed source." ;