JUDGMENT :

Shah, J.

1. The respondent is a firm dealing in handloom cloth and silk fabrics and has its head office at Banaras and a branch office at Madura. In proceedings for assessment for Assessment Year 1946-47 the Income Tax Officer declined to rely upon the books of account of the assessee, and estimated the business profits of the assessee by applying a flat rate of 12½% to the turnover of the business. The Income Tax Officer also found in the books of account an entry dated January 15, 1945 of a deposit of Rs. 20,000 in the name of M/s Banshidhar Rawatmal of Ratangarh. The Income Tax Officer called upon the assessee to prove the nature and source of this deposit and after considering the evidence produced by the assessee rejected the plea of the assessee that the amount was deposited by M/s Banshidhar Rawat Mal. In the view of the Income Tax Officer the amount of Rs. 20,000 represented the assessee's income from some undisclosed source.

2. The order relating to the addition of Rs. 20,000 in addition to the estimated income was challenged before the Appellate Assistant Commissioner and before the Tribunal, but without success. The Tribunal was of the view that the evidence of M/s. Banshidhar of Banshidhar Rawatmal that he had Rs. 20,000 which he received from his Jajman was unreliable, and that the Income Tax Officer was right in estimating the turnover from sales and in applying a rate for determination of the profit. It was not argued before the Tribunal that if the case of the assessee that the amount of Rs. 20,000 was deposited by M/s. Banshidhar Rawatmal with him it should be treated as income which was part of the business of the assessee in handloom cloth and silk fabrics.

3. An application filed by the assessee under Section 66(1) of the Income Tax Act to submit a statement of case to the High Court of Allahabad was rejected. But the High Court directed the Tribunal to submit a statement of case on the question whether there was "any material to hold that the sum of Rs. 20,000 was income of the assessee from some other source, and was not income included in the assessed income on the rejection of the books of account". Pursuant to this direction, the Tribunal submitted a statement of the case raising the following question:

"Whether on the facts and in the circumstances of the case, there was any material to hold that the sum of Rs. 20,000 was income of the assessees from some other source and was not income included in the assessed income on the rejection of the books of account?"

The Tribunal in making the reference observed that at no stage of the proceeding did the assessee urge that the sum of Rs. 20,000 "got merged with the estimate of profit made in the business at the head office": the only objection raised by the assessee was that the sum should not have been added as income from some undisclosed source.

4. The High Court considered the matter in great detail and recorded an answer in favour of the assessee. The Commissioner has appealed against that order with a certificate granted by the High Court.

5. There is nothing in law which prevents the Income Tax Officer in appropriate case in taxing both the cash credit the source and nature of which is not satisfactorily explained and the business income estimated by him under Section 13 of the Income Tax Act, after rejecting the books of account of the assessee as unreliable. This was so decided in Kale Khan Mohammad Hanif v. CIT., 50 ITR 1 Whether in a given case the Income Tax Officer may tax the cash credit entered in the books of account of the business, and at the same time estimate the profit must, however, depend upon the facts of each case.

6. It is unnecessary to elaborate this question in this case, because in our view the question on which the High Court directed the Tribunal to state a case and which the High Court answered did not arise out of the order of the Tribunal. As we have already stated, before the Tribunal at the hearing of the appeal under