JUDGMENT

M. C. DESAI, C.J. - Under this court direction the Income Tax Appellate Tribunal, Allahabad Bench, has referred the statement of case for answering the question of law arising, viz :

"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 assessee from some other source and was not income included in the assessed income on the rejection of the books of account ?"

The assessee is registered firm dealing in handloom cloth, Kashi silk, etc., with its head office in Banaras. For the assessment year 1946-47, for which the accounting period was September 27, 1944, to October 15, 1945, the assessee submitted a return showing loss. The Income Tax authorities rejected the accounts produced by it and made an assessment by estimating income under the proviso to section 13, at the rate of 10% profit. In the account books there was an entry of cash deposit of Rs. 20,000 standing in the name of one Banshidhar Rawatmal. The Income Tax authorities called upon the assessee to prove the nature and source of the deposit. They disbelieved the explanation offered by it and held that the sum of Rs. 20,000 was its income from some undisclosed source, i.e., " from sources within their knowledge and not disclosed to the department". They added this sum of Rs. 20,000 to the estimated amount of profit and assessed it on an income of Rs. 35,883. The assessment was maintained by the Tribunal on appeal, which rejected both the contentions advanced before it, namely, (1) the Income Tax authorities were not justified in treating the cash deposit of Rs. 20,000, as the assessees income from an undisclosed source and (2) that they were not justified in rejecting the books of account and in making an assessment by estimate. The assessee did not at all contend before the Tribunal that, if the sum of Rs. 20,000 was to be treated as its income, it could be treated as its income from its business and not from an undisclosed source and that it should have been held to have been included in the estimated income of the business and should not have been added to it. The appeal before the Tribunal had proceeded on the footing that, if it was an income, from an undisclosed source and not from the business and was, therefore, in addition to the estimated income from the business. It, however, referred the question whether there was any material to justify the finding that the income was from a source other than the business under the express directions from this court.

The assessee is known to carry on only one business, namely, that of sale of handloom cloth and Kashi silk, etc.; there is no material whatever to suggest that it carries on any other business. The Income Tax authorities and the Tribunal treated the income of Rs. 20,000 as an income from an undisclosed source without expressly stating that, and without even discussing whether it is from a source other than the business. They held that it is an income from an undisclosed source just because the source was not known to them; this fact was made clear by the Income Tax Officer. The source was undisclosed; this means that it could not be said that the income was not from the business. It might have been from this business, or it might have been from another business, or another source; the Income Tax authorities and the Tribunal knew nothing whatsoever about it. This absence of knowledge on their part does not mean that the income was necessarily from a source other than the business; in the face of their professed ignorance of the source, they could not say that it was from another source and not the business any more than they could say that it was from the business. "Undisclosed" means undisclosed and not "partially disclosed and partially undisclosed". To say that "undisclosed source" is a source known to be other than the disclosed business but not known to be of a particular nature is to indulge in self contradiction. The