JUDGMENT

The judgment of the court wads delivered by

BHARGAVA J. - The question referred by the Income Tax Appellate Tribunal for the opinion of this court is :

"Whether there was any material to warrant the finding that the sums of Rs. 16,200 and Rs. 13,700 in dispute were profits of the assessee liable to tax ?"

The assessee in this case is a registered firm having three partners, Pooranchand, Shivji Bhai and Parshotam. Parshotam is the son of Shivji Bhai. The proceedings relate to the assessment year 1945-46 for which the relevant previous year ran from 29th October, 1943, to 13th October, 1944. The assessee firm submitted a return on the basis of the account books and the trading result as disclosed was accepted by the Income Tax Officer with only minor additions which additions were subsequently deleted by the Appellate Assistant Commissioner. In one respect, however, the account books were not accepted. That related to these two entries of credits of sums of Rs. 16,200 and Rs. 13,700 in the accounts of the assessee firm in the name of Mahesh Chandra Agrawal, minor son of Pooranchand, partner, and of Channalal Agrawal father of Pooranchand, partner. In respect of these two items the Income Tax Officer called upon the assessee to disclose the real source of these amounts credited in the books of account of the assessee and held on rejection of the explanation given by the assessee that these two amounts were income of the assessee from undisclosed sources. On appeal the Appellate Assistant Commissioner upheld the decision though coming to the view that these amounts represented income not from entirely undisclosed sources but from black-marketing activities of the firm. The assessee went up in appeal to the Income Tax Appellate Tribunal which upheld the decision for adding these amounts to the profits of the assessee firm and dismissed the appeal. The appellant moved the Income Tax Appellate Tribunal u/s 66(1) of the Income Tax Act to state the case to this court on the ground that the decision for holding that these two items represented taxable profits of the assessee was given without any material or evidence. The Tribunal rejected that application. Thereupon the assessee moved this court u/s 66(2) of the Income Tax Act and the court directed the Tribunal to state the case after framing the question as reproduced above. The statement of the case has now been received and we have heard learned counsel for the parties on this question.

In dealing with the question referred to us for opinion it will be convenient to take each item separately. The first item is the sum of Rs. 16,200 credited on various dates in an account in the name of Mahesh Chandra Agrawal who is admittedly a minor son of one of the partners, Pooranchand. The circumstances and facts which appear from the appellate order of the Tribunal, the statement of the case and the documents which form part of the statement of the case as annexures relating to this point are as follows :

(1) That this sum of Rs. 16,200 was credited in the account of Mahesh Chandra Agrawal during the relevant previous year on various dates between 18th of April, 1944, and 7th of September, 1944, through Pooranchand himself.

(2) That there was a similar account in the name of Mahesh Chandra Agrawal in the previous year corresponding to the preceding assessment year 1944-45 and in the account of that previous year there were transfers of some credits and debits from the account of Pooranchand to the account Mahesh Chandra Agrawal.

(3) In the objection which was filed on behalf of the assessee no attempt was made to claim that the moneys shown in the account actually belonged to Mahesh Chandra, Minor, who being the son of Pooranchand was under his guardianship.

On the other land it was admitted that Pooranchand was operating on this account.

(4) The explanation which was offered on behalf of the assessee for these entire of deposits in the account of Mahesh Chandra Agrawal was merely that these d