The previous year for the purpose of assessment of income from undisclosed sources is the accounting year shown by the assessee in his books of account, and not the financial year preceding the assessment year.

1. The assessee in this case is a Hindu undivided family dealing" in the business of mica, cloth, and grain. The assessment year is 1947-48. The accounting period of the mica business was the calendar year 1946 and for cloth and grain was the Diwali year 2002-2003 which corresponded to the period 19-11-1945 to 26-10-1946. The assessee had maintained his books of account for these businesses according to these accounting, years. The original assessment was made by the Income-Tax Officer on a sum of Rs. 5117 as total income derived by the assessee from property and from business The Income-tax Officer later on discovered that on 21-1-1946 the assessee had encashed high denomination notes to the extent of Rs. 22,000. A proceeding under Sec.34 was started against the assessee who was asked to explain the source of this amount. The assessee explained that the amount was a part of the cash balance of the business. This explanation was rejected and the Income-tax Officer assessed the whole amount of Rs. 22,000, as secreted profits of the assessee from the business. An appeal was preferred by the assessee to the Appellate Assistant Commissioner who allowed the appeal to the extent of Rs. 3,000 and held that the balance of Rs. 19,000 should be held to be the secreted profits of the assessee. A further appeal was taken to the Tribunal on behalf of the assessee. The Tribunal affirmed the view, of the Appellate Commissioner that the amount of Rs. 19,000, represented the secreted profits of the assessee from the business, but the Tribunal considered that the amount could not be taxed during the assessment year 1947-48. The reason given by the Tribunal was that the encashment of the high denomination notes took place on 21-1-1946, and there could be no previous year in respect of income from undisclosed sources other than the financial year preceding the assessment year. The Tribunal, therefore, held that the amount should not have been assessed to tax for the assessment year 1947-48 and allowed the appeal preferred on behalf of the assessee.

2. In this state of facts the Tribunal has submitted the following question of law for the Opinion of the High Court. "Whether on the facts and circumstances of the case, the sum of Rs. 19,000, was liable to inclusion in the assessees total income for the assessment year 1947-48".

3. On behalf of the Income-Tax Department, Mr. Tarkeshwar Prasad made the submission that the Tribunal was wrong in law in taking the view that the amount of Rs. 19,000 should not have been taxed for the assessment year 1947-48. It was pointed out by the learned counsel that for the mica business the assessee kept his account books according to the calender year 1946 and for the cloth and grain business the account books were kept according to Diwali year 2002-2003 Samwat, corresponding to the period from 19-11-1945 to 26-10-1946. In the course of assessment the assessee had intimated his option that the previous year should not be the financial year 1946-47 but should be the accounting year for the two businesses according to the books of account. The point taken by Mr. Tarkeshwar Prasad was that it was not open to the Tribunal to say that the secreted profits which the assessee had made from the businesses of mica and cloth and grain should not be assessed for the previous year according to the account maintained by the assessee himself. In our opinion the argument of the learned counsel is well founded. The Income-tax Officer has mentioned in the course of his order that the amount of Rs. 22,000, represented the income of the assessee from the secret source of the business At p. 6 of the paper book the Income-tax Officer has mentioned that the two businesses of the assessee were (a) mica and (b) cloth and grain. The Income-tax Officer has made rare reference to the fact that during the war period "highly profitable deals of short duration were not unknown." If the order of the Income-tax Officer is read as a whole,