The onus of proof is on the Income-tax Department to show that funds contributed by a coparcener of a Hindu undivided family came from the funds of the family.

Kamla Sahai, J.

1. In this case, the assesses is a Hindu undivided family consisting of M. L. Rungta (Mangilal Rungta) and his sons. Three of those sons are M. G. Rungta (Madan Gopal Rungta), B. N. Rungta) (Biswanath Rungta) and S. R. Rungta (Sitaram Rungta). The questions which arise for decision in this case relate to the income from Jugasalai Electric Supply. Co. The assessees case is that shares are held in the Electric Supply Co. as follows:

M.L. Rungta (as representing the Hindu undivided family)....as. -/4/-

M. G. Rungta.... -/4/-

B. N. Rungta.... -/4/-

S. R. Rungta.... -/2/-

An Outsider....as. -/2/-

2. The assessment years in question are 1945-46, 1946-47, 1947-48 and 1948-49. But the assessment in respect of each of the assessment years does not have to be separately considered because the point involved is the same. The Income-tax Officer held that the shares allotted to M. G. Rungta, B. N. Rungta and S. R. Rungta in the Jugasalai Electric Supply Co. were all held by the Hindu undivided family in their names, as the funds said to have been contributed by these coparceners of the family to the Electric Supply Co. were the funds of the Hindu undivided family. The assessee took an appeal to the Appellate Assistant Commissioner of Income-tax in respect of each of the assessment years but the appeals failed. The assessee then took a further appeal in respect of each of the assessment years to the Income-tax Appellate Tribunal and the Tribunal, by its order dated 3-7-1952, held that the share standing in the name of Sitaram Rungta was held by him in his individual capacity. It, however, dismissed the appeals in respect of the shares held in the names of M. G. Rungta and B. N. Rungta. On being required by a Bench of this Court under Sec. 66(2), Income-tax Act, to do so, the Income-tax. Appellate Tribunal has stated a case and has referred it on the following question of law:

"1. Whether there was any material before the Income-tax Appellate Tribunal to find that the capital standing in the names of the two partners, M. G. Rungta and B. N. Rungta, belonged to the Hindu undivided family.

2. Whether under the facts and circumstances of the case inclusion of the profits of M. G. Rungta and B.N. Rungta in the firm Messrs. Jugasalai Electric Supply Co. in the assessment of the petitioner was legal and valid?"

Both these questions are inter-connected and the real point for consideration is whether there was any material before the Appellate Tribunal on the basis of which it could be held that the capital said to have been contributed by M. G. Rungta and B.N. Rungta was really capital advanced by the assessee family.

3. Appearing for the assessee, Mr. Dutta has drawn jour attention to the abstracts of accounts appearing at pages 86 to 91 of the paper-book. The account book of the firm Harkarandass Mangilal of Calcutta, in which the assessee family is admittedly interested, shows that M.G. Rungta deposited a total amount of Rs. 20,000 on different dates and B.N. Rungta deposited a sum of Rs. 20,000 in one lump sum with this firm in the account of Jugasalai Electric Supply Co. The whole of this amount of Rs. 40,000 was transferred to the assessee family and the account book of" the assessee family shows that it was credited to the Electric Supply Co. The account book of the Electric Supply Co. shows that this Company received from the assessee family Rs. 64,847-7-3 partly as value of goods purchased and partly in cash. It further shows that the capital of this Company was made up as follows:

M.L. Rungta ... ... Rs. 25,000

M.G. Rungta ... ... 20,000

B.N. Rungta ... ... 20,000

S.R. Rungta ... ... 5,000

M.D. Agarwalla ... ... 2,100

Total ... Rs. 72,100

4. A perusal of the accounts mentioned above clearly shows that M.G. Rungta and B.N. Rungta deposited Rs. 20,000 each with the firm Harkarandass Mangilal and these amounts ultimately came to the Jugasalai Electric Supply Co. which treated them as sums contributed by these persons