Chakravartti, C.J. - (1.) The facts of this Reference are a little unusual in that in making an assessment on the assessee, the Department seems to have proceeded by the method of trial and error.
(2.) It appears that there are in the town of Howrah three houses, standing in the name of a lady, named Srimati Lila Devi. Those houses are premises Nos. 132, 133 andi 134, Netaji Subhas Road. On premises No. 132 stands a cinema-house called 'Shyamasree Talkies' which is also in the name of the lady and which has been functioning since March, 1946. In February, 1948, Lila Devi voluntarily submitted a return of her income for the accounting year 1946-47 which, in her case, was the usual financial year. The return showed an income of Rs. 334-13-0 from property and Rs. 5,682-7-0 as income from the cinema business. The Income-tax Officer accepted the lady's figure as regards her income from property, but thought that the true income from the cinema business should be Rs. 11,500/- and not the amount shown by her. He did not, however, complete the assessment. He was about to do so when his mind appears to have been assailed by doubts as to whether the capital on which the business was being run was the lady's own and, if not, whether she would be the right person to be assessed. For the removal of that doubt he issued a notice to the lady on 9-6-1948, and asked her to explain the source from which the capital introduced by her into the business had come. The amount, it appears, was Rs. 25,381/-.
(3.) By a letter dated 22-6-1948, the lady replied to the notice served on her and stated that the capital of the cinema business had come from the dowry given to her by her father. The actual text of the letter has been set out in the order of assessment. The lady, it appears, said that the amount had been paid to her by her father in cash on various dates and since no record had been kept, neither her father, nor herself was in a position to furnish the exact dates of payment and receipt of the various sums. The Income-tax Officer was not prepared to accept the lady's explanation as true. He recorded an order to the effect that since the lady was unable to produce any evidence that the capital had really come from her father, it was to be presumed that the contributor had been her husband, the present assessee. In that view, he kept the lady's assessment pending and issued a notice to the present assessee on 21-7-1948, under Section 22(2), read with Section 34 of the Act, asking him to furnish a return of his income for the assessment year 1947-48. The assessee filed a return on 30-7-1948, in which, besides showing his receipt from salary of Rs. 7,348/-he included the sums of Rs. 334/-13-/ & Rs. 5,347-10-0 as his wife's income assessable in his hands under Section 16(3) of the Act. The inclusion of the last two sums was "under protest". It seems somewhat curious that the assessee should have included those sums at all even when furnishing his return, but the Tribunal points out that he must have come to know of the order recorded by the Income-tax Officer in his wife's file. The assessment of the assessee was next taken up. His return as to his income from salary was acceptedl and in addition to that income, the amounts of Rs. 335/- and Rs. 11,500/-, which had already been determined in the wife's file as her income from house property and the cinema business respectively, were included in his total income. The assessee appears to have acceptedl the assessment and did not appeal against it. The assessment was completed on 31-7-1948, and on the same day the wife's file was closed.;