B.R. Arora, J. - (1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, at the instance of the assessee, for the assessment years 1970-71, 1971-72, 1973-74 and 1975-76 (R. A. No. 107 to 110/JP/85) has referred the following questions of law for the opinion of the High Court : "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Officer was justified in issuing notice under Section 148 of the Income-tax Act and taking action under Section 147 accordingly ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding additions made to the income declared on the ground of lesser agricultural expenses shown as income from other sources and rejecting the assessee's contention that this could be only added as being the agricultural income of the assessee ?
(2.) THE Tribunal, for the assessment year 1977-78 (RA No. 106/JP/85), also referred the following question of law for the opinion of the High Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding additions made to the income declared on the ground of lesser agricultural expenses shown as income from other sources and rejecting the assessee's contention that this could be only added as being the agricultural income of the assessee ?" The assessee is a Hindu undivided family. The assessment years under question are 1970-71, 1971-72, 1973-74, 1975-76 and 1977-78. The dispute in all these matters relates to the assessee's income from agriculture. The assessee filed returns declaring non-taxable income for the years 1974-75, 1975-76, 1976-77 and 1977-78. The return of the assessee for the assessment year 1976-77 was thoroughly scrutinised by the Income-tax Officer, "C" Ward, Hanumangarh. The assessing authority, during the course of the scrutiny, found certain investments in the purchase of the land and other assets and, therefore, the assessee was asked by the Income-tax Officer to furnish details and explain the source. The assessee thereupon filed a copy of the income and expenditure account pertaining to agriculture for the years 1969-70 to 1976-77. The Assessing Officer was of the view that the assessee has filed the return with highly inflated income from agriculture and he, therefore, framed the assessment on protective measure because the assessee has filed the return in that status. He did not believe the quantum of agricultural income disclosed by the assessee and made addition to the assessee's income from "undisclosed sources". The assessee preferred appeals against the assessment order passed by the Income-tax Officer, "C" Ward, Hanumangarh. As all the six appeals of the assessee related to the dispute of the assessee's income from agricultural land, the Appellate Assistant Commissioner, Bikaner Range, Bikaner, decided all these appeals by a common order dated March 7, 1984. Aggrieved with the order dated March 7, 1984, the assessee preferred six appeals before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. The Tribunal, by its judgment dated June 28, 1985, allowed the appeal filed by the assessee for the assessment year 1974-75 and quashed the assessment order, but so far as the remaining appeals are concerned, those were dismissed by the Tribunal. The assessee thereafter moved an application under Section 256(1) of the Income-tax Act to refer the questions of law, mentioned in the application, for the opinion of the High Court for all these years and the Tribunal referred the questions of law, mentioned in para. No. 1 above, for the opinion of the High Court. It is contended by learned counsel for the assessee that the Income-tax Officer was wrong in reopening the assessment of the assessee and no case for issuing the notice under Section 148 of the Act was made out and the reasons given by the Income-tax Officer for reopening the matter were not germane to the case of the assessee. It has also been contended by learned counsel for the assessee that the burden was on the Revenue to show under what head the income was chargeable and as the assessee has only income from agriculture, therefore, the only conclusion which was possible was that the income, which was added by the Income-tax Officer, should have been considered as income from agriculture only. In support of his contention, learned counsel for the assessee has placed reliance over Parekh Traders v. CIt [1984] 150 ItR 510 (Bom), CIt v. Smt. T.P. Sidhwa [1982] 133 ItR 840 (Bom), CIt v. City of Ahmedabad Spg. and Mfg. Co. Ltd. [1981] 129 ItR 507 (Guj), Gujarat Ginning and Mfg. Co. Ltd. v. CIt [1977] 107 ItR 590 (Guj), Nalinikant Ambalal Mody v. S.A.L. Narayan Row, CIt [1966] 61 ItR 428 (SC), Janab A. Syed Jalal Sahib v. CIt [1960] 39 ItR 660 (Mad) and United Commercial Bank Ltd. v. CIt [1957] 32 ItR 688 (SC). Learned counsel for the Revenue, on the other hand, has supported the orders passed by the Tribunal as well as the income-tax authorities and submitted that the Income-tax Officer, before issuing the notice under Section 148 of the Act, had recorded the reasons and rightly issued the notices and initiated the proceedings under Section 147 of the Act and the orders passed by the Tribunal as well as by the other income-tax authorities do not require any interference. We have considered the submissions made by learned counsel for the parties. Section 148 of the Act deals with the issuance of notice where income has escaped assessment and requires that the Assessing Officer, before issuing the notice, should record his reasons for doing so. The reasons recorded by the assessing authority in the present case for issuing the notice, which are recorded in the proceedings for the assessment year 1976-77, are that "the assessee was inflating the income from agriculture with the following objectives : (i) formation of capital; (ii) to bring hidden capital to valid and white income, (iii) to show that the investment in the agricultural land worth Rs. 70,000 was made out of the income from agriculture." It has also been recorded in the course of assessment proceedings for the assessment year 1975-76 that a sum of Rs. 86,000 was invested by the assessee in various banks in the form of fixed deposits besides some saving accounts'. The Income-tax Officer discussed all these facts for the assessment year 1976-77. The reasons given by the assessing authority for reopening the assessment, as certain income escaped assessment, were germane to the issue. The underassessment in the case of the assessee was because of its having failed to disclose fully and truly all the facts in relation to these assessments and, therefore, the reopening of the assessments for all these years was right. The assessing authority rightly issued the notice under Section 148 and rightly initiated the proceedings under Section 147 of the Act. The contention raised by learned counsel for the assessee is, therefore, bereft of any force.
(3.) THE second contention raised by learned counsel for the assessee is that the burden was on the Revenue to show under which head the income was chargeable and as the assessee derived income only from agriculture, therefore, the addition could have been made only in the "agricultural income" of the assessee and not under the head "Income from undisclosed sources". It is true that the burden is on the taxation authority to show that a receipt constitutes an income and that income is liable to tax under the Act ; but when the assessee pleaded certain exemption from tax or that a receipt falls in a particular class of income then the burden lies on the assessee to prove that and not on the Revenue. THE assessee, in the present case, claimed exemption from tax on the added income on the ground that the income in question is "agricultural income" and, therefore, the burden was on the assessee to prove that the income was from agricultural sources and not on the Revenue. THE assessee failed to prove the added income from agricultural sources and, therefore, the assessing authorities were right in treating the income as "income from undisclosed sources". The judgments on which reliance has been placed by learned counsel for the assessee do not deal with the present controversy in hand and, therefore, they are of no assistance to the assessee. However, it may be stated that the following principles emerge from the decision of the Supreme Court in Nalinikant Ambalal Mody v. S.A.L. Narayan Row, CIT [1966] 61 ITR 428 : " (i) The several heads of income mentioned in Section 6 of the Indian Income-tax Act, 1922, are mutually exclusive ; a particular income can come only under one of them ; (ii) if the receipts can be brought under one head of income, e.g., the fourth head of income in Section 6, viz., 'Profits and gains of business, profession or vocation', they cannot be brought under the residuary head as the heads of income are mutually exclusive ; (iii) whether an income falls under one head or the other has to be decided according to the common notion of practical men, for, the Act does not provide any guidance in the matter. In other words, the heads of income must be decided on the nature of the income by applying practical common notions and not by reference to the assessee's treatment of income ; (iv) whether an income is included in any of the heads other than the residuary head would depend on what kind of income it is, and if the income is profit or gain of profession, it cannot come under Section 12, for Section 12 does not say that an income which escapes taxation under a preceding head will be computed under it for chargeability to tax ; (v) an income has to be brought under one of the heads in Section 6 and can be charged to tax only if it is so chargeable under the computing section corresponding to that head. Income which comes under the fourth head, that is, professional income, can be brought to tax only if it can be so done under the rules of computation laid down in Section 10. If it cannot be so brought to tax, it will escape taxation even if it be included in the total income under Section 4. The expression 'total income' in Section 3 has to be understood as it is defined in Section 2(15). Under that definition, total income means 'total amount of income, profits and gains referred to in Sub-section (1) of Section 4 computed in the manner laid down in the Act', that is, computed for the purpose of chargeability under one of the sections from Section 7 to Section 12B. The correct approach on the setting of the relevant provisions would be first to classify the item under consideration under the appropriate head of income as mentioned in Section 6. For this purpose, the character or the nature of the income has to be determined. Further, the nature of the income must be decided according to common notions of practical men because the Act does not provide the guidelines." The ratio of all these cases, on which reliance has been placed by learned counsel for the assessee is that for determining the income under a particular head, the purpose, the character or the nature of the income has to be determined and the income has to be decided according to the common notions of practical men as the Act does not provide any guidelines. The assessee has inflated the income under the head "Agricultural income" and deflated the expenses. The income-tax authorities, after consideration of the material available on record, came to the conclusion that such inflated income from agriculture was not possible and, therefore, rightly determined the added income as "income from undisclosed sources." The onus was on the assessee to show the extent of the agricultural income which the assessee failed to do and the explanation submitted by the assessee was not accepted by the income-tax authorities and, therefore, the assessee's added income was rightly assessed by the assessing authorities under the head "Income from other sources". ;