Shah, J. - (1.) The respondent is a firm dealing in handloom cloth and silk fabrics and has its head office at Banaras and a branch office at Madura. In proceedings for assessment for the assessment year 1946-47 the Income-tax Officer declined to rely upon the books of account of the assessee, and estimated the business profits of the assessee by applying a flat rate of 12 1/2% to the turnover of the business. The Income-tax Officer also found in the books of account an entry dated January 15, 1945, of a deposit of Rs. 20,000 in the name of Messrs. Banshidhar Rawatmal of Ratangarh. The Income-tax Officer called upon the assessee to prove the nature and source of this deposit and, after considering the evidence produced by the assessee, rejected the plea of the assessee that the amount was deposited by Messrs. Banshidhar Rawatmal. In the view of the Income-tax Officer the amount of Rs. 20,000 represented the assessees income from some undisclosed source.
(2.) The order relating to the addition of Rs. 20,000, in addition to the estimated income, was challenged before the Appellate Assistant Commissioner and before the Tribunal, but without success. The tribunal was of the view that the evidence of Banshidhar of Messrs. Banshidhar Rawatmal that he had Rs. 20,000 which he received from his jajman was unreliable, and that the Income-tax Officer was right in estimating the turnover from sales and in applying a rate for determination of the profit. It was not argued before the Tribunal that if the case of the assessee that the amount of Rs. 20,000 was deposited by Messrs. Banshidhar Rawatmal with him (sic) it would be treated as income which was part of the business of the assessee in handloom clothe and silk fabrics.
(3.) An application filed by the assessee under section 66(1) of the Income Tax Act to submit a statement of case to the High Court of Allahabad was rejected. But the High Court directed the Tribunal to submit a statement of case on the question whether there was "any material to hold that the sum of Rs. 20,000 was income of the assessee from some other source, and was not income included in the assessed income on the rejection of the books of account". Pursuant to this direction, the Tribunal submitted a statement of the case raising the following question : "Whether on the facts and in the circumstances of the case, there was any material to hold that the sum of Rs. 20,000 was income of the assessee from some other source and was not income included in the assessed income of the rejection of the books of account - ;