Judgement

SHAH, J.:- The appellant a trader in groundnuts and other commodities in the State of Mysore was taxed under the Mysore Income-tax Act, 1923, for the assessment years ending with the assessment year 1949-50. On July, 1, 1949, the assessee brought into his books of account an opening cash balance of Rs. 1,87,000/-. In proceedings for assessment to tax for the year which ended June 30, 1950, the assessee was called upon to explain that entry and to produce his books of account of the earlier years. The assessee pleaded that his books of account upto June 30, 1949, were lost and that the amount of Rs. 1,87,000/- represented "cash brought from an iron safe kept in his house". The Income-tax Officer found that in each previous year when the assessee was assessed under the Mysore Income-tax Act, he had pleaded that his books of account were either lost or stolen in the succeeding year. The Income-tax Officer was of the view that the assessee had probably an amount of Rs. 50,000/- on hand representing a cash balance brought forward from the previous year, and that the balance of Rs 1,37,000/ was the assessee s income from undisclosed sources. The order passed by the Income-tax Of