UPADHYA, J. - (1.) THE questions referred for the opinion of this court are : 1. Whether there was any evidence to prove that the cash deposits of Rs. 3,200, Rs. 3,500 and Rs. 1,000 totalling Rs. 7,700 entered in the account books of the firm Bachhoolal Chotey Lal in the name of Kailash Chand, Mst. Ram Piari and Bachhoolals mother respectively were the revenue receipts of the assessee ? 2. Whether there was any evidence to prove that this amount could be treated as revenue receipts for the relevant accounting year ? THE assessee is a Hindu undivided family carrying on business in gold and silver. THE pedigree of the family, as set out in the statement of the case, is as follows : Ram Kishan Das Mst. Ram Piari (dead) (his wife) ___________________________________________________________ ___ | | | Munnoolal Radhey Shiam Lakshmi Narain | | Bachhoolal Triloki Nath | Kailash Chand Bachhoolal, a member of the family as shown above, is a partner of the firm carrying on business in the name and style of Bachhoolal Chotey Lal. It has been held by the Income-tax authorities that Bachhoolal is a partner in that firm in his individual capacity and not as a representative of the assessee family.
(2.) IN the account book of the firm, Bachhoolal Chotey Lal, the following deposits appear in the previous year relevant to the assessment for 1944-45 : 1. Rs. 3,500 credited in the name of Kailash Chand (son of Bachhoolal). 2. Rs. 3,500 credited in the name of Mst. Ram Piari. 3. Rs. 1,000 credited in the name of Bachhoolals mother. It appears that during the assessment proceedings of the assessee family the Income-tax Officer issued a notice under section 23 (3) of the Income-tax Act calling upon the assessee to explain the deposits and to show cause why these amounts should not be treated as revenue receipts of the family. Radhey Shiam, father of Bachhoolal, appeared and made a statement on oath giving some explanation as to how the persons in whose name the deposits stand came to have the money. He did not admit that the amounts represented revenue receipts of the family. The explanation given by Radhey Shiam was not believed by the Income-tax Officer and he treated the aggregate of these amounts to be the income of the family and included it in the total income assessed. On appeal the Appellate Assistant Commissioner affirmed the decision. It appears that in proceedings in respect of the assessment year 1939-40 of the assessee family a statement of total wealth was filed. The assessment order, annexure B, is a part of the statement of the case. In it the Income-tax Officer says that a statement of wealth was filed. The assessee contended before the Appellate Assistant Commissioner that in that statement of total wealth a sum of Rs. 5,000 was said to be lying in cash with Smt. Ram Piari, and another sum of Rs. 3,000 was said to be lying with Bachhoolals mother, and these amounts could be available for the deposits in dispute. The Appellate Assistant Commissioner called for the statement of total wealth from the Income-tax Officer, and annexure C" is the letter sent by the Income-tax Officer, Lucknow. It appears that the statement of total wealth was not available to the Appellate Assistant Commissioner and he did not accept the accuseds contention.
(3.) ON appeal before the Appellate Tribunal the authorised representative of the Central Board of Revenue attached to the Income-tax Appellate Tribunal, Allahabad, called for the statement of total wealth again and annexure C" appended to the statement of the case is a copy of the letter sent by the Income-tax Officer to the authorised representative, saying that the miscellaneous file for 1939-40 was not traceable and that the statement of total wealth filed by the assessee as mentioned in the assessment order was also not traceable. The assessees explanation, therefore, was not accepted and the decision of the Income-tax Officer was affirmed by the Appellate Tribunal in appeal. Learned counsel for the assessee contended that the deposits in question could not be treated as the income of the assessee family because there was no evidence to justify such treatment. The amounts had been found credited in the account books of the firm. It is the firm, therefore, which had actually received these amounts on the dates on which they were credited in its account books. If any knowledge of the exact source of these amounts could be attributed to anybody, it could be attributed certainly to the firm itself which was in a position to know as it who deposited these amounts. Learned counsel for the Department states that these amounts were not treated as items of income of the firm itself. It was, therefore, evident that these deposits did represent amounts belonging to the persons in whose names they stood. We have not been referred to any piece of evidence on the record persons in whose names they stood but belonged actually to the family. Learned counsel for the Department at one stage contended that an inference could be drawn against an assessee if an explanation offered relating to a cash deposit was disbelieved by the Income-tax Officer. A Bench of this court considered in some detail the question as to when an inference may be drawn by an Income-tax Officer against an assessee in such matters. In Mithoo Lal Tek Chand v. Commissioner of Income-tax, Malik, C. J., after an examination of the case cited, observed as follows :;