Moosa S. Madha & Azam S. Madha Vs.
Commissioner of Income-Tax, West Bengal, Calcutta [1973] INSC 24 (6 February
1973)
ALAGIRISWAMI, A.
ALAGIRISWAMI, A.
HEGDE, K.S.
REDDY, P. JAGANMOHAN
CITATION: 1973 AIR 2356 1973 SCR (3) 497 1973
SCC (4) 128
ACT:
Income-tax Act, 1922, s. 4A(a)(iii)-Assessee
held to be 'resident' but 'nor ordinarily resident'-Burden of proving that his
visit to India in relevant period was occasional and casual was on
assessee-Burden not discharged by mere assertion that he had no business in
India-Question whether remittance of Income was from accrued profits/Burden of
Proving that it was not from accrued profits-was on assessee-Question that
Tribunal did not consider photostat copies of accounts produced before it not
raised in application under s. 66(1)-High Court rightly refused to take such
copies into account.
HEADNOTE:
In respect of the assessment year 1948-49 the
Income-tax Officer's finding that the assessee was 'resident but not ordinarily
resident' in that year in India was confirmed by the Appellate Assistant
Commissioner and the Tribunal. It was also held that a sum of Rs. 2 lakhs
remitted by the assessee to India from Burma during the relevant period formed
part of the assessee's accrued profits. The High Court answered both the
questions in favour of the Revenue.
The assessee appealed with certificate.
HELD : (i) For the finding that the assessee
was 'resident' but 'not ordinarily resident' in the year in question the
authorities under the Act as well as the High Court had relied on the fact that
the assessee has failed to prove his visit to India in 1947 was casual or
occasional. This was essentially a finding of fact. [501B-C] The burden of
proving that the assessee's visit to India in 1947 was occasional or casual was
on the assessee. In the affidavit filed by him before the Department he merely
stated that he visited India for a period of two months in 1947 but did not
state the reason for visiting India nor did he state his visit was occasional
or casual. In the face of this affidavit it was idle for the assessee to
contend that the Tribunal came to an erroneous conclusion in holding that he
did not discharge the burden of proving that his visit to India in 1947 was
occasional or casual. The fact that the assessee had no business in India
during the period of stay of two months did not discharge the onus. [500 F-G;
501C-E] Commissioner of Income-tax, West Bengal v. B. K. Dhote, 66 I.T.R. 457,
referred to.
(ii) The assessee had also failed to prove
that the sum of Rs. 2 lakhs remitted by him to India did not represent his
business income. Even though the Income-tax Officer gave him several
opportunities to produce his account books to establish his case he failed to
produce the account books.
[501 H] The complaint that the Tribunal
ignored the photo stat copies of the account books without good reasons did not
appear to have been made in the application filed by the assessee under s.
66(1). The statement of' case submitted by the Tribunal does not refer to that
fact. Admittedly the assessee did not take up any question regarding these
documents. Hence the High Court was fully justified in not considering those
documents. [502A-D]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 491 of 1970.
498 Appeal by certificate from the judgment
and order dated June 3, 1969 of the Calcutta High Court in Income-tax Reference
No. 72 of 1966.
N. N. Goswami and S. N. Mukherjee, for the
appellant H. C. Bhandare, S. P. Nayar, J. Ramamurthy and R. N. Sachthey, for
respondent.
The Judgment of the Court was delivered by
HEGDE, J. This is an appeal by certificate. It arises from the decision of the
High Court of Calcutta in a reference under section 66(1) of the Income Tax Act
1922 (to be hereinafter referred to as the Act). It relates to the assessee's income
tax assessment for the assessment year 1948-49, the relevant accounting year
being the calendar year 1947.
The material facts as could be gathered from
the statement of case submitted by the Tribunal are as follows:
The assessee, one S. C. Madha (since
deceased) appears to have migrated with his father to Burma in about the year
1901. They were originally the residents of the village Variav in the erstwhile
State of Baroda. In Burma the assessee carried on business in soap and
umbrella. It is seen that he was a successful businessman. The assessee's
father died in 1936 and thereafter the business was carried on by a partnership
consisting of the assessee and his sons.
The assessee had ancestral property in
Variay. He purchased a plot of land in Bombay in 1942. After the bombing of
Burma in 1942 the assessee came over to India and remained in India till 1946.
He returned to Burma in February 1946.
Under instructions from the partnership firm,
the firm's bankers, the National Bank of India Limited, Rangoon, remitted to
Calcutta in the year 1946 a sum of Rs. 5 lakhs, and the same was credited to
assessee's account. Again on October 26, 1947 a further sum of Rs. 2 lakhs was
transferred by the bankers of the partnership to the National Bank of India
Ltd., Calcutta and credited in the name of the assessee. Out of the total
amount of Rs. 7 lakhs remitted from Rangoon, Rs. 5 lakhs was utilised by the
assessee for the purchase of two properties in Calcutta; one in the year 1948
and the other in the year 1949. On April 8, 1953, the assessee filed a
voluntary disclosure petition before the Income Tax Department at Calcutta and
followed up the same with nine voluntary returns for the assessment years
1944-45 to 1952-53, disclosing certain incomes from the properties in India as
well as from his business in Burma during those assessment years. As those
returns were not filed within time the Income Tax Officer took proceedings
under section 34(i) (a) of the Act for the assessment years 1947-48 and
1948-49. The Income Tax Officer assessed the assessee in the status of a
'resident' but 'not ordinarily 499 resident on a total income of Rs. 6,24,478
for the assessent year 1947-48 and Rs. 3,55,214 for the assessment year 1948
49. In determining the assessee's residential
status in these two assessment years the Income Tax Officer relied on the facts
stated by the assessee in his voluntary disclosure statements as well as on the
affidavit filed by him. He also took into consideration the fact that the
assessee had purchased a property in Bombay in the year 1942 and the further
fact that in the years 1948 and 1949 be had purchased two premises in Calcutta.
Aggrieved by the order of the Income Tax
Officer the assessee went up in appeal to the Assistant Appellate Commissioner.
The Assistant Appellate Commissioner remanded the case back to the income Tax
Officer for the reason that on the materials collected by the Income Tax
Officer, he was unable to come to any firm conclusion. Thereafter the Income
Tax Officer held further enquiries and reached the very conclusion which he had
reached earlier. On appeal the Assistant Appellate Commissioner confirmed the
order of the Income Tax Officer. On a further appeal, the Tribunal came to the
conclusion that the assessment of the assessee for the assessment year 1947-48
was unsustainable and it accordingly set aside that order but it affirmed the
assessee's assessment for the assessment year 1948-49.
The Tribunal came to the conclusion that the
assessee was a resident' but 'not ordinarily resident' in India during the
calendar year 1947. It further came to the conclusion that the amounts remitted
from Rangoon to Calcutta were remitted by the assessee for his use in India. It
also held that the amounts remitted formed part of the assessee's accrued
profits.
Aggrieved by the decision of the Tribunal the
assessee moved the Tribunal to submit two questions of law to the High Court of
Calcutta under s. 66(1). The Tribunal accepted that prayer and submitted the
following two questions to the High Court of Calcutta :
(i) On the facts and in the circumstances of
the case. was there any material or evidence for the Tribunal to hold that the
assessee was a resident but not ordinarily resident in the taxable territories
for the assessment year 1948-49 ? (ii) Whether, on the facts and in the
circumstances of the case, the Tribunal was justified in holding that the
amount of Rs. 2 lakhs had been remitted to the taxable territories by the
assessee during the accounting year out of his accrued profits of earlier years
? The High Court answered both those questions in favour of the Revenue. Hence
this appeal.
500 For deciding the question whether the
assessee was a 'resident' in India but 'not ordinarily resident' in India in
the calendar year 1947, we must first examine the scope of section 4A (a)
(iii). That section reads :
"For the purposes of this Act(a) any
individual is resident in the taxable territories in any year if he(i)................
(ii)................
(iii) having within the four years preceding
that year been in the taxable territories for a period of or for periods
amounting in all to three hundred and sixty-five days or more, is in the
taxable territories for any time in that year otherwise than on an occasional
or casual visit;
(iv)...................
To determine whether this provision applies
to the facts of the present case we must find out :(1) Whether during the first
of January 1943 to 31st of December 1946 the assessee was in India for a period
of three hundred and sixty five days or more;
Whether the assessee was in India at any time
between the 1st January 1947 to 31st December, 1947; and (3) Whether the
presence of the assessee in India in 1947 was not an occasional or casual
visit.
So far as the first two ingredients are concerned
there is no dispute. It is admitted that the assessee was in India during the,
years 1943-46 for a period of more than three hundred and sixty five days. It
is also admitted that he was in India for a period of two months in the year
1947.
Therefore, the only question that requires to
be decided is whether his visit to India in 1947 was occasional or casual.
The burden of proving this point is
undoubtedly on the assessee. The Department cannot be expected to prove a
negative. The assessee knows best why he stayed in India for a period of two
months in 1947. This question is, no more res Integra. In Commissioner of
Income Tax, West Bengal v. B. K. Dhote(1), this court ruled that in order that
the assessee may be treated as resident in British India under Section 4A (a)
(iii) of the Act the onus of proving that the assessee was in British India
during the four years preceding the previous year (1) 66 I.T.R. 457.
501 for a period of or for periods amounting
in all to three hundred and sixty-five days and in the relevant previous year
at any time, lies upon the Department. But if these two conditions are
established or admitted, the onus lies upon the assessee to prove that his
visits in the previous year were occasional or casual. In the present case it may
be noted that the Income Tax Officer, the Assistant Appellate Commissioner, the
Tribunal as well as the High Court have come to the conclusion that the
assessee failed to prove that his visit to India in 1947 was casual or
occasional. This is essentially a finding of fact. Hence the only point that
calls for decision is whether the finding reached by the Tribunal is
unsupported by any evidence. We have earlier stated the legal position. The
burden of proving that the assessee's visit to India in 1947 was occasional or
casual is on the assessee. According to the Tribunal the assessee had not
discharged that burden.
The assessee had produced no evidence
whatsoever to prove that his visit during the year in question was an
occasional or casual. Worst still is, in the affidavit filed by him before the
Department he merely stated that he visited India for a period of two months in
1947 but did not state the reason for visiting India nor did he state that his
visit was occasional or casual. In the face of this affidavit it is idle for
the assessee to contend that the Tribunal Came to an erroneous conclusion in
holding that he did not discharge the burden of proving that his visit to India
in 1947 was occasional, or casual, The sole circumstance on which Mr. Goswami,
the learned counsel for the appellant, relied on was that the assessee had no
business in India. The fact that the assessee had no business in India during
the period of his stay of two months in India does not discharge the onus which
is placed on the assessee to show that his visit to India was occasional or
casual.
For the reasons mentioned above we agree with
the, High Court in the answer given to the first question.
Now turning to the second question,
admittedly the assessee had no business in India. He had not explained why in
the year 1947. Rs. two lakhs were remitted from Burma to India.
It is seen from the evidence on record that
the assesses did purchase a house in Calcutta in 1948. The assessee contended
before the Tribunal as well as before the High Court that the money transferred
from Burma to India was his capital asset and not income earned from business
in Burma.
This was a matter which the assessee had to
prove. He has failed to prove the same. Even though the Income Tax Officer gave
him several opportunities to produce his Account Books to establish his case
that the money remitted to India did not represent his business income, he
failed to produce his Account Books. It was contended by Mr. Goswami that he
produced certified photo stat copies of his accounts before the Tribunal and
the Tribunal erred in not considering those documents.
In the first place it must be noted that the
assessee has no satisfactory explanation for not producing Ms account books
before the Income Tax Officer as well as the Assistant Appellate Commissioner.
Photostat (Copies have very little evidentiary value' Further it is seen from
the order of the Tribunal that there is no reference to the photostat copies in
that order. It does not appear from that order that any reliance was placed on
those documents before the Tribunal.
The complaint that the Tribunal ignored those
documents without good reasons does not appear to have been made in the
application 'filed by the assessee under section 66(1).
The statement of the case submitted by the
Tribunal does not refer to that fact. Admittedly the assessee did not take up
any question regarding those, documents. Hence the High Court is fully
justified in not considering those documents.
In our opinion the Tribunal was right in its
conclusion that the remittance of Rs. 2 lakhs from Burma to India during the year 1947 is not proved to be the capital asset of the assessee. Hence,
there is no reason to interfere with that finding of the Tribunal. In this
respect also we are fully in agreement with the High Court. For the reasons
mentioned above this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.
Back
