Income-tax---

----Income from undisclosed sources---Income-tax Officer treating part of agricultural income declared by assessee as income from undisclosed sources---On basis of evidence produced and report of Tehsildar, Appellate Authority increasing estimate of agricultural income ---Tribunal confirming-- Justified---Indian Income Tax Act, 1961.

The assessee-Hindu undivided family derived income from house properties and agricultural holdings and had declared an income of Rs.5,000 and 10,000 for the years 1978-79 and 1979-80, respectively, which were subsequently revised to Rs.35,000 in each of the two years. The Income-tax Officer accepted the agricultural income at Rs.5,000 and Rs10,000, respectively, and treated the excess income of Rs.30,000 and 25,000 for the years 1978-79 and 1979-80 as income from undisclosed sources. On appeal, the additions were reduced to Rs.15,000 for each of the two years. The Tribunal upheld the order of the Appellate Authority. On a reference:

Held that on the basis of evidence produced by the assessee and the report of the Tehsildar, the agricultural income was increased from Rs.10,000 to Rs.20,000 by the Appellate Authority taking it to be an approximate estimate. Essentially it was a question of fact. The Tribunal. was justified in treating a. part of the income declared as agricultural income by the assessee-HUF as its income from undisclosed sources.

Parimesetti Seetharamamma v. CIT (1965) 57 ITR 532SC ref.

G. N. Purohit for the Assessee.

Abhay Sapre for the Commissioner.

JUDGMENT

A. K. MATHUR, C.J.----This is an Income-tax reference at the instance of the assessee and the following question of law has been referred by the Tribunal for answer by this Court:

"Whether the Appellate Tribunal, in the-facts and circumstances of the case, was justified in treating a part of the income declared as agricultural income by the assessee-Hindu undivided family as its income from undisclosed sources?"

The brief facts giving rise to this reference are these: The assessment years are 1978-79 and 1979-80. The assessee-Hindu undivided family had derived income from house properties and agricultural holdings and had declared an income of Rs.5,000 and Rs.10,000 for the years 1978-79 and 1979-80, respectively, which were subsequently revised to Rs.35,000 in each of the two years. The Income-tax Officer accepted the agricultural income at Rs.5,000 and Rs.10,000, respectively, and treated the excess income of Rs.30,000 and Rs.25,000 for the accounting years 1978-79 and. 1979-80 as 'the assessee's income from undisclosed sources. The assessee-Hindu undivided family indisputably owned about 200 acres of cultivable agricultural land. The Income-tax Officer made additions .of Rs.30,000 and Rs.25,000 in the accounting years 1978-79 and 1979-80, respectively, as the assesee's income from undisclosed sources. The assessee filed an appeal in which the additions were reduced to Rs.15,000 for each of the two years.

In appeal before the Tribunal, the assessee could not succeed.. Hence, it moved an application before the Tribunal for making a reference to this Court and accordingly the aforesaid question of law has been referred for answer of this Court.

We have heard learned counsel for the parties and perused the record. Essentially it was a question of fact whether the Tribunal was justified in treating part of the income declared as agricultural income by the assessee as his income from undisclosed sources. The assessee, as a matter of fact, initially when it filed the return, did not disclose his income and then after a lapse of about three years, it disclosed its income of Rs.35,000 both the years. The assessment was made on the basis of evidence before the Income-tax Officer and before the appellate authority which reduced the increased amount of agricultural income on the basis of evidence which was before the appellate authority on the basis of the report from the Tehsildar and other evidence placed by the assessee before the Tribunal.

Learned counsel for the assessee contended before us that the finding recorded by the Income-tax Officer as well as by the appellate authority has no basis, the Department has not produced any evidence and, therefore, whatever facts have been brought on record by the assessee, should be accepted. We do not share the view of learned counsel. It is always open for the assessing authority to go through the material placed before it by the assessee and find that from whatever has been produced by the assessee, if the income of the assesse does not appear to correspond with the assessed income it is open for the assessing authority to reduce that amount and the burden is not shifted on the Department. It is only for the assessee to produce the material before the assessing authority which has to make the assessment to and it is not for the Department to bring any material to contradict the estimates submitted by the assessee. In the present case, on the basis of evidence produced by the assessee and report of the Tehsildar, the income from agriculture was increased from Rs.10,000 to Rs.20,000, taking it to be an approximate estimate and no hard and fast rule can be made out on the questions of fact. Therefore, we are of the opinion that the assessment made by the assessing authority does not suffer from any infirmity.

Learned counsel for the assessee invited our attention to the case of Parimisetti Seetharamamma v. CIT (1965 (57 ITR 532 (SC). In that case, the assessee's income was not found to be correct by the High Court and, therefore, the Supreme Court reversed that decision. But there is no reason in the present case to take a different view. Moreover, it is purely a question of fact.

We accordingly answer this question in favour of the Revenue and against the assessee. .

M.B.A./3191/FCReference answered.