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Tolaram Daga v. Commissioner Of Income-Tax Assam, Nagaland, Manipur And Tripura .

Gauhati High Court
Mar 30, 1965
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Structured Summary of Opinion — C.S Row Nayudu, J.

Factual and Procedural Background

This Income-tax Reference arises from a question referred by the Tribunal to the High Court: whether the sum of Rs. 10,719 standing in the name of the assessee's wife (Smt. Munni Devi Daga) as a deposit (including interest) in the books of the firm Messrs Motilal Inderchand represented the undisclosed income of the assessee for the assessment year 1958–1959.

Procedural history (as disclosed in the statement of the case): the Income-tax Officer noticed an entry of Rs. 10,000 dated 23-4-1957 in the personal account of the wife in the firm's books, and Rs. 719 interest credited at the end of the accounting year. The Income-tax Officer treated the amount as income of the assessee from an undisclosed source because the petitioner allegedly failed to explain the source. The Appellate Assistant Commissioner affirmed the assessment. The petitioner appealed to the Income-tax Appellate Tribunal, which rejected his appeal on several factual grounds and referred the question to this Court in obedience to a requisition dated 15th January 1964 (Civil Rule No. 10(M)/63 in the matter of Shri Tolaram Daga v. Commissioner of Income-tax).

Key factual particulars: the petitioner was a partner in Messrs Motilal Inderchand; the deposit in question appeared in the firm's books as standing in the name of Smt. Munni Devi Daga; the petitioner asserted the deposit came from his wife's earlier savings and from presents received at marriage; the Tribunal found lack of corroborative evidence and noted a similar deposit by another partner's wife on the same day.

Legal Issues Presented

  1. Whether, on the facts and circumstances of the case, there was any material before the Tribunal to hold that the sum of Rs. 10,719 standing in the name of the wife of the assessee as a deposit (including interest) in the books of the firm Messrs Motilal Inderchand represented the undisclosed income of the assessee for the assessment year 1958–1959.

Arguments of the Parties

Appellant's (Petitioner's) Arguments — as presented by Mr. Ghose

  • The deposit of Rs. 10,000 (plus Rs. 719 interest) stood in the firm's accounts in the name of Smt. Munni Devi Daga and the firm records and entries constitute prima facie evidence that the deposit belonged to her.
  • The petitioner produced a declaration by Smt. Munni Devi Daga stating the deposit was her money and that she made the deposit; the petitioner placed all papers in his power before the Income-tax Authorities and the Tribunal.
  • It was contended that the petitioner had explained that the monies originated from presents in cash (around Rs. 9,000 at the time of marriage, increasing to about Rs. 15,000 by March 1952) and that the contested deposit was made out of that pool.
  • The burden to displace the presumption created by the firm's accounts and the depositor's declaration lay upon the Department; in the absence of contrary evidence from the Department, the Tribunal should not have treated the deposit as the assessee's undisclosed income.
  • The Tribunal's reliance on the fact that a similar deposit was made by another partner's wife on the same day was irrelevant to the nature of the deposit made by Smt. Munni Devi Daga.

Respondent's (Department's) Arguments — as presented by Mr. Pathak

  • The Tribunal reached a factual finding that the monies belonged to the assessee and not to the depositor; such a finding of fact is binding on the High Court in a reference and the Court should not supplant the Tribunal's factual conclusion as if it were an appellate court.
  • Because the depositor is the wife of the petitioner, the circumstances relating to how she acquired and deposited the monies may be within the petitioner's special knowledge; therefore the burden lay on the petitioner to prove the source of the monies.
  • On the materials available, the Tribunal's factual conclusion was justified and the question should be answered in the affirmative (i.e., the sum represented undisclosed income of the assessee).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Nabadwip Chandra Roy v. Commissioner of Income-tax, Assam, 1962-44 ITR 591 (Assam) When an amount is shown to have been deposited by a third party, prima facie it cannot be regarded as a receipt by the assessee; burden lies on the Department to show otherwise. The Court stated it was fully in agreement with this decision and adopted the principle that a third-party deposit is prima facie not the assessee's receipt.
S.N. Ganguly v. Commissioner of Income-tax, B & O, 1953-24 ITR 16 (AIR 1954 Pat 51) There is no presumption that an amount standing in the name of the wife belongs to her husband; in absence of contrary evidence, the money must be presumed to belong to the wife and the onus is on the Department to show otherwise. The Court relied on this authority to support the proposition that the Department must produce material to displace the presumption that the amount belonged to the wife.
Radhakrishna Behari Lal v. Commissioner of Income-tax, B & O, 1954-26 ITR 344 (AIR 1955 Pat 249) Similar principle as S.N. Ganguly: money standing in the name of wife presumed to belong to her and onus to show otherwise is on the Department. The decision was cited as support for the rule that the burden shifts to the Department where the entry shows the deposit to be of a third party.
Commissioner Of Income Tax, Madras v. M. Ganapathi Mudaliar, 1964-53 ITR 623 (SC) Where the High Court is to consider whether there is material to support a Tribunal's finding of fact, it should not act as an appellate court to re-evaluate evidence; authority that an assessee's failure to prove source may permit the ITO to draw an adverse inference (when credit stood in assessee's name). The Court distinguished this case: there credit was shown in the name of the assessee (not a third party), so the principle did not apply to the present facts where the credit stood in a third party's name.
V. Govindarajuly Mudaliar v. Commissioner Of Income Tax, Hyderabad, 1958 34 ITR 807 (AIR 1959 SC 248) Where an assessee fails to prove satisfactorily the source or nature of certain cash received by him, ITO may draw the inference that receipts are assessable; burden on the assessee in such cases. The Court observed that this principle applies where the credit is in the name of the assessee; it distinguished the present case because the credit stood in a third party's name.
Kale Khan Mohammad Hanif v. Commissioner of Income-tax, (1963) 50 ITR 1 (SC) Authority cited (with V. Govindarajuly Mudaliar) for the proposition that failure by assessee to explain cash receipts may justify treating them as assessable. The Court treated this as inapplicable on the facts because the deposit here was recorded in the name of a third party.
P.V. Raghava Reddi v. Commissioner of Income-tax, Madras, 1956-29 ITR 946 (AIR 1957 Andh Pra 926) Proposition that burden of proof does not depend exclusively on whether the credit entry is in the assessee's name or a third party's; the onus may nevertheless lie on the assessee to explain a credit entry in some circumstances. The Court found the case distinguishable on its facts but quoted it to note that once an assessee explains a credit as belonging to a third party, the burden may then shift to the Department to show the entry is not genuine (e.g., pseudonymous).
Ramkinkar Banerji v. Commissioner of Income-tax, B. & O., (1936) 4 ITR 108 (AIR 1936 Pat 267) Earlier authority to the effect that where a sum is shown in books in the name of a third party, the onus to show it belongs to the assessee lies on the Department. Quoted in support of the proposition that entries in a third party's name shift the initial onus to the Department once the assessee explains the credit as third-party money.
Mehta Parikh & Co. v. Commissioner Of Income Tax, Bombay, AIR 1956 SC 554 High Court may interfere with a fact-finding authority if it acted without evidence or on a view of facts that no reasonable judicial authority could have entertained; distinguishes questions of fact and questions of law. The Court cited this as guiding the scope of interference in a reference: the High Court can intervene where the fact-finding is unsupported by evidence or is unreasonable.
Homi Jehangir Gheesta v. Commissioner Of Income Tax, Bombay City, AIR 1961 SC 1135 Order of the Tribunal should be examined as a whole; Tribunal must not base conclusions on conjecture, surmise or irrelevant considerations. The Court invoked this principle to criticize the Tribunal's reliance on the irrelevant circumstance of a similar deposit by another partner's wife and to uphold that the Tribunal must consider evidence fairly.

Court's Reasoning and Analysis

The Court's analysis proceeded in several discrete steps, grounded in the evidence placed before the authorities and established legal principles:

  1. On the contention that section 106 of the Evidence Act placed the burden on the petitioner because the depositor was his wife, the Court rejected this contention. The Court explained that section 106 applies only where a fact is especially within the knowledge of a person. The mere fact that the depositor was the assessee's wife does not ipso facto establish that the assessee had special knowledge of the source of the funds; whether he did have such knowledge must be determined by evidence.
  2. The Court observed that the firm's accounts produced in the case had been accepted and acted upon by the Department, and that there was no serious challenge to their genuineness or regularity. Consequently, under section 34 of the Evidence Act, entries in properly kept accounts afford prima facie proof of the correctness of those entries. Therefore, an account entry showing a deposit in the name of a third party is prima facie proof that the deposit was made by that person.
  3. Requiring the firm or its partners to go further and prove the sources from which third-party deposits in the firm's books were derived would impose an undue and legally unjustified burden. In many cases the firm or partners may not be able to ascertain how a depositor realised the funds before making a deposit.
  4. In the present case the Court noted two additional supportive facts for the petitioner's position: (a) a declaration by Smt. Munni Devi Daga affirming that the money belonged to her and that she made the deposit, and (b) that she had been assessed for income-tax on the basis of a return she had made. These facts strengthened the prima facie inference that the deposit belonged to her and were relevant to the Court's assessment.
  5. The Court held that the Tribunal erred in demanding that the petitioner prove the source from which his wife had acquired the funds, and erred in drawing an adverse inference against the petitioner for failing to do so.
  6. The Court further held that the Tribunal erred in treating the coincidence of another partner's wife making a similar deposit on the same day as material against the petitioner. The Court characterized that circumstance as possibly coincidental or explained by mutual investment decisions, and in any event as totally irrelevant to the nature of Smt. Munni Devi Daga's deposit. The Court concluded the Tribunal improperly relied upon this irrelevant circumstance.
  7. The Court considered and applied relevant case law: it endorsed the Division Bench decision in Nabadwip Chandra Roy which places the onus on the Department to produce material showing a third-party entry does not belong to that third party. The Court distinguished Supreme Court authorities relied upon by the Department (for example, Ganapathi Mudaliar and cases where credits stood in the assessee's name), concluding those decisions do not apply where the credit entry is in the name of a third party.
  8. Applying these principles to the facts before it, the Court concluded that the materials did not justify the Tribunal's finding that the deposit was the assessee's undisclosed income.

Holding and Implications

Core Ruling: The Court answered the referred question in the negative: it held that there was no material before the Tribunal to justify the conclusion that the sum of Rs. 10,719 standing in the name of Smt. Munni Devi Daga represented the undisclosed income of the assessee for the assessment year 1958–1959.

Consequences and immediate effects:

  • The Tribunal's conclusion that the amount was the assessee's undisclosed income was found to be unsustainable in law and impliedly reversed by this reference decision.
  • The Court declined to make any order as to costs.
  • No broader new precedent was explicitly asserted to have been laid down by the Court in this opinion; the Court aligned itself with existing authorities (notably Nabadwip Chandra Roy and related precedent) in articulating the applicable legal principle regarding third-party deposits and burden of proof.

Reference: Opinion delivered by C.S Row Nayudu, J.; answer to reference given in the negative; no order as to costs.

Show all summary ...

C.S Row Nayudu, J.:— The question referred to us in this Income-tax Reference is:

“Whether on the facts and in the circumstances of the case there was any material before the Tribunal to hold that the sum of Rs. 10,719 standing in the name of the wife of the assessee as a deposit including interest in the books of accounts of the firm Messrs Motilal Inderchand, of which the assessee is a partner, represented the undisclosed income of the assessee for the assessment year 1958–1959?”

2. This reference was made in obedience to the requisition of this High Court elated 15th January, 1964, in Civil Rule No. 10(M)/63 in the matter of Shri Tolaram Daga v. The Commissioner of Income-tax, Assam, Nagaland, Manipur and Tripura.

3. The facts out of which this reference has arisen, as disclosed from the statement of the case submitted by the Tribunal, are briefly as follows: The reference in question relates to the income-tax assessment for 1958–1959, the relevant accounting year being the year ending on 12-4-1958, corresponding to 2014 R.N The assessee, hereinafter referred to as the petitioner in this reference, is an individual. He is a partner in two registered firms, one of which is Messrs Motilal Inderchand, Calcutta, with which we are concerned. During the assessment proceedings for the year in question, the Income-tax Officer noticed an item of Rs. 10,000 bearing date 23-4-1957 appearing in the personal account of Smt. Munni Devi Daga, the wife of the petitioner, in the books of the firm Messrs Motilal Inderchand. It was also found that at the end of the accounting year, a sum of Rs. 719 had been credited to this account of Smt. Munni Devi Daga towards interest. While making the assessment order, the Income-tax Officer noted that the petitioner was unable to explain the source of this deposit in the name of Smt. Munni Devi Daga on being called upon to do so, and thereupon the Income-tax Officer treated this amount as an item of income received by the petitioner from an undisclosed source. On appeal before the Appellate Assistant Commissioner, the petitioner stated that this amount was deposited by his wife as her savings from earlier years and also relied on the declaration to that effect made by Smt. Munni Devi Daga. The Appellate Assistant Commissioner, however, affirmed the order of the Income-tax Officer. Thereafter the petitioner preferred a second appeal to the Income-tax Appellate Tribunal, hereinafter referred to as the Tribunal, before whom further elucidation was made by the petitioner, who indicated that his wife had received presents in cash to the extent of Rs. 9,000 from her parents and relations and friends at the time of her marriage, which had swelled to Rs. 15,000 by March, 1952, and the deposit in question was made out of this amount. But the Tribunal took the view that the evidence did not support that Smt. Munni Devi Daga had received Rs. 9,000 at the time of her marriage, which took place thirteen years before the date of the deposit and that no evidence was available to establish how and with whom the money was invested during this period. The Tribunal also did not attach much importance to the fact that the petitioner's wife had been separately assessed by another Income-tax Officer on the basis of a voluntary return made by her, and as no account books had been produced by the petitioner's wife, they did not attach much weight to the declaration made by her. The Tribunal further held that evidence corroborating the petitioner's explanation was absent and further taking into consideration the circumstance that a similar deposit of Rs. 10,000 had been made by the wife of another partner of the same firm on the same day, the Tribunal rejected the appeal preferred to it by the petitioner. As already pointed out, this reference was made by the Tribunal in obedience to the directions given by this Court. It is contended by Mr. Ghose, the learned counsel for the petitioner, that the order of the Tribunal was clearly unsustainable, that the petitioner had placed all the papers in his power before the Income-tax Authorities as well as the Tribunal, that as the amount in question stood in the accounts of the firm in the name of Smt. Munni Devi Daga as having been deposited by her in cash on 23-4-1957 and that as the case of the petitioner is substantiated not only by the entries in the Firm's accounts but also by the declaration made by the depositor, there is abundant evidence to establish that the deposit related to the monies belonging to Smt. Munni Devi Daga, who had made the deposit and that in the absence of any evidence on record to the contrary supplied by the Department, the Tribunal was not justified in treating the said deposit as the money belonging to the petitioner and derived from undisclosed sources. Mr. Ghose further took strong exception to the Tribunal taking into consideration the circumstance that a similar deposit was made by another lady on the same day, which, he contended, was totally irrelevant in determining the true nature of the deposit made by Smt. Munni Devi Daga. He further contended that when an entry in the accounts of the firm showed that an amount was deposited by a third person, this itself affords a prima facie proof that the money belonged to the person in whose name the account stood and that the deposit was made by her in the absence of any proof to the contrary. In such circumstances, he pointed out, the burden lay on the Department to prove that the money which is shown in the accounts to have been deposited by a third party, was, in fact, not so deposited but actually belonged to the assessee and not to the depositor, and that this burden had not been discharged by the Department. He, accordingly, claimed that as he had filed a declaration of Smt. Munni Devi Daga, who had made the deposit, to the effect that it was her money that was deposited and that it was she that deposited the same, the decision of the Tribunal was wrong and that the question referred to us should be answered in the negative.

4. It is contended by Mr. Pathak, the learned counsel for the Department, that on the materials available before the Tribunal, the Tribunal had come to a finding of fact that the monies belonged to the assessee and not to the actual depositor, that this finding of fact is binding on this Court in a reference of this Kind and that it is not open to this Court to sit in judgment over the decision of the Tribunal as if it were a Court of Appeal. He further pointed out that as the depositor is only the wife of the petitioner and that as the circumstances in which the monies came to be acquired by his wife and deposited with the firm must have been within the special knowledge of the petitioner himself, the burden is on him to establish the actual source of the monies deposited, and that, as such a proof has not been adduced to the satisfaction of the Authorities and the Tribunal, the petitioner cannot claim any relief and that the Tribunal's finding is perfectly in order and that the question should be answered in the affirmative.

5. The main point that falls to be determined in this reference is, in a case like the present one where a deposit is shown to have been made by a third party in the accounts of the firm and that the third-party claims the money as hers and that it was she that made the deposit, whether the petitioner (assessee) should go further and prove from what source or sources the money deposited was realised by the third-party.

6. At the outset, we have to point out that there is no substance in the contention that the sources from which the money was realised by the third-party are within the special knowledge of the petitioner as the depositor happens to be his wife. Whether he has knowledge at all of the source of the money deposited by the third-party is a matter, which has to be decided on evidence. The mere fact that the third-party making the deposit happens to be the wife of the assessee does not ipso facto make the assessee come into the knowledge of the sources from which the money was realised. Under law, in the absence of specific proof of that knowledge, it cannot be assumed that the assessee has the knowledge in question within the meaning of section 106 of the Evidence Act. In order to rely on this section, which lays down that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him, it must be established first that the person has special knowledge of that fact, having regard to the circumstances of the case. As illustration (b) to the section shows, when A is charged with travelling on a railway without a ticket, the burden of proving that he had a ticket is on him, obviously because it is he alone that would have special knowledge regarding the possession of the ticket. The instant case is by no means a parallel and, in our opinion, section 106 of the Evidence Act cannot, therefore, be invoked in aid.

7. It would appear that the accounts of the firm which had been produced in the case had been accepted and acted upon by the Department and no serious challenge had been made to their genuineness or that they were kept regularly in the course of business. That being the case, the accounts are relevant and afford prima facie proof of the entries and the correctness thereof under section 34 of the Evidence Act, so that where a deposit is found to have been made by a third party in the accounts of the firm, that entry is prima facie proof that the amount in question was deposited by the person in whose name the deposit stands. To require the firm or the individual partners to go further and adduce proof of the sources from which the deposits in question appearing in the accounts in the name of third-parties were derived by them, would be placing a burden on the firm as well as the partners, which is not required or justified by law. For aught we know, in most cases it may well-nigh be impossible for the firm or the partners to know or determine the sources from which the money deposited with them had been realised by the depositors. In the instant case, we have not only the accounts of the firm showing that the deposit stood in the name of Smt. Munni Devi Daga, but we have also, in addition, the declaration made by her that the money belonged to her and the deposit was made by her. It is also significant that this lady is also assessed to income-tax on the basis of a return made by her. The enquiry as to the source from which this amount was acquired or obtained by Smt. Munni Devi Daga may, perhaps, be relevant in an investigation into the assessment to be made regarding her income and when determining the correctness of the return submitted by her. But the mere fact that the petitioner was unable to satisfy the Authorities as to the source from which Smt. Munni Devi Daga derived the monies which she deposited with the firm, cannot, in our opinion, be used against the petitioner. The Tribunal, therefore, was not justified in either demanding this proof or in drawing an adverse inference against the assessee on his failure to produce the same.

8. The only other circumstance relied on by the Tribunal is that a similar sum of Rs. 10,000 was deposited on the same day by another partner's wife with the firm. This circumstance might have been a coincidence or may have been done by the two ladies agreeing to invest their respective monies with the firm. Whatever may be the reason, the fact that somebody else made a similar deposit on the same day is, in our opinion, totally irrelevant in deciding upon the nature of the deposit made by Smt. Munni Devi Daga. The Tribunal, in our opinion, therefore, was not justified in relying on the circumstance as a piece of evidence against the petitioner. Undoubtedly, it is not a “material” at all on which the Tribunal could base its decision.

9. In this connection, Mr. Ghose placed reliance on a Division Bench decision of this Court in Nabadwip Chandra Roy v. Commissioner of Income-tax, Assam, 1962-44 ITR 591 (Assam), wherein it was held that in cases where the amount is shown to have been deposited by a third party, prima facie it cannot be regarded as a receipt by the assessee — much less a taxable income — and in that event it is for the department, if they want to tax it as an income of the assessee, to show by some materials that the amount standing in the name of the third party does not belong to that third party but belongs to the assessee. It was further held by the learned Judges in that case that by merely holding that the assessee has not established the source of receipt of that amount by the third party, the department cannot claim that it has placed material which leads conclusively to the result that it was an income of the assessee from some undisclosed source. We are fully in agreement with the decision in that case as well as the reasoning adopted by the learned Judges therein.

10. In S.N Ganguly v. Commissioner of Income-tax, B & O, reported in 1953-24 ITR 16 : (AIR 1954 Pat 51), the learned Judges of the Patna High Court held that there is no presumption in law that an amount standing in the name of the wife belongs to her husband and that in the absence of evidence to the contrary, the money standing in the name of the assessee's wife must be presumed to belong to her and the assessee cannot be taxed in respect of such an amount. The learned Judges further held in that case that the onus of proof in such a case will not be on the assessee but will be on the department to show by at least some material that the amount standing in the name of the assessee's wife did not belong to her but belonged to the assessee. To a similar effect is the decision of the same High Court reported in Radhakrishna Behari Lal v. Commissioner of Income-tax, B & O, 1954-26 ITR 344 : (AIR 1955 Pat 249).

11. As against these, Mr. Pathak, the learned counsel for the Department, relied on a decision of the Supreme Court reported in Commissioner Of Income Tax, Madras v. M. Ganapathi Mudaliar, 1964-53 ITR 623 (SC). This decision merely laid down that where the question referred to the High Court is regarding the existence of material to support a finding of fact arrived at by the Tribunal, the High Court should not act as an appellate court and consider whether the finding was justified on the evidence. In that case, their Lordships were dealing with a case of a credit item of 87,500 dollars standing in the books of the assessee. As this item stood in the name of the assessee and not in third-party's accounts, their Lordships held, following their earlier decisions in V. Govindarajuly Mudaliar v. Commissioner Of Income Tax, Hyderabad, Hyderabad, (1958) 34 ITR 807 : (AIR 1959 SC 248) and Kale Khan Mohammad Hanif v. Commissioner of Income-tax, (1963) 50 ITR 1 (SC), that where an assessee failed to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature and that the burden is on the assessee of proving the source of the money so received. This case has no application to the facts of the instant case, where the money in question stood in the name of a third-party and not in the name of the assessee.

12. Mr. Pathak placed reliance on the decision of the erstwhile Andhra High Court reported in P.V Raghava Reddi v. Commissioner of Income-tax, Madras, 1956-29 ITR 946 : (AIR 1957 Andh Pra 926), which is clearly a case distinguishable on the facts of that case, in support of the proposition that the question of burden of proof cannot be made to depend exclusively upon the fact of a credit entry in the name of the assessee or in the name of a third party and that in either case, the burden lies upon the assessee to explain the credit entry. But the learned Judges constituting the Bench in that case, were conscious of the fact that the onus might shift to the Department under certain circumstances. This is clear from the following quotations which their Lordships extracted in their judgment, occurring at p. 948 (of ITR) : (at p. 929 of AIR) from 1954-26 ITR 344 : (AIR 1955 Pat 249):

“But the position is different in regard to a sum which is shown in the assessee's books in the name of a third party. In such a case, the onus of proof is not upon the assessee to show the source or nature of the amount of the cash credit; on the other hand, the onus shifts to the Department to show by some material that the amount standing in the name of the third party does not belong to that third party but belongs to the assessee. That is the principle laid down by a Division Bench of this Court in S.N Ganguly's pase, (1953) 24 ITR 16 : (AIR 1954 Pat 51). There is a decision to a similar effect in an earlier case, Ramkinkar Banerji v. Commissioner of Income-tax, B. & O., (1936) 4 ITR 108 : (AIR 1936 Pat 267).” All that could be said to follow from this decision is that once the assessee explains the credit entry and brings in evidence to show that the entry related to a third party and that credit was that of that third party, the burden would shift to the Income-tax Officer to prove that this is not true. For instance, it would be open to the Income-tax Officer in such a case to establish that the entry was not real but was pseudonymous.

13. On a consideration of these decisions, we are clearly of the opinion that the law as laid down by a decision of this Court in (1962) 44 ITR 591 (Assam) is the correct one.

14. Another decision on which Mr. Pathak placed reliance is the one reported in Mehta Parikh & Co. v. Commissioner Of Income Tax, Bombay, Bombay, AIR 1956 SC 554, apparently, in support of the proposition that a finding on a question of fact by the Tribunal is as much binding on the Revenue as on the subject. But, that decision itself lays down the correct approach to the question by pointing out “that facts proved or admitted may provide evidence to support further conclusions to be deduced from them, which conclusions may themselves be conclusions of fact and such inferences from facts proved or admitted could be matters of law”. Dealing with the power of the High Court to interfere in a reference, it was pointed out that “the court would be entitled to intervene if it appears that the fact-finding authority has acted without any evidence or upon a view of the facts, which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question”.

15. Another decision on which Mr. Pathak placed reliance is AIR 1959 SC 248. The particular passage on which reliance was placed, occurs at p. 249 and is as follows:—

“There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature.”

16. In that case, their Lordships of the Supreme Court were satisfied with the conclusions to which the Appellate Tribunal came, as appearing to them to be amply warranted by the facts of that case and consequently called for no interference. On the facts of that case, it would appear that certain amounts appeared in the account books of the firm, of which the assessee was a partner, as credits from him. This clearly distinguishes the facts of the instant case where the credit is in the name of a third party and not in the name of the assessee. The last case on which Mr. Pathak placed reliance is the one reported in Homi Jehangir Gheesta v. Commissioner Of Income Tax, Bombay, Bombay City, AIR 1961 SC 1135, apparently, in support of the proposition that the order of the Tribunal was to be examined as a whole to determine whether every material fact, for and against the assessee, had been considered fairly and with due care, and whether the evidence pro and con had been considered in reaching the final conclusion, and whether the conclusion reached by the Tribunal had been coloured by irrelevant considerations or matters of prejudice. Their Lordships further held that the order of the Tribunal need not be examined sentence by sentence, through a microscope as it were, so as to discover a minor lapse here or an incautious opinion there, to be used as a peg on which to hang an issue of law. In that case, their Lordships further made it clear that the Tribunal should not indulge in conjectures, or surmises or suspicions in considering the probabilities properly arising from the facts. On the facts and circumstances of that case, their Lordships came to the conclusion that the only proper inference was that the receipt in question must be treated as income in the hands of the assessee. That was again not a case where the disputed amount stood in the name of the third party in the accounts of the firm.

17. On a careful consideration of the facts and circumstances of the case and the law applicable thereto, we are satisfied that there is no justification for the conclusion reached by the Tribunal that the sum of Rs. 10,719 which stood in the name of Smt. Munni Devi Daga, the wife of the petitioner, was not shown to be not her money but the money of the assessee himself and that therefore the decision of the Tribunal is clearly unsustainable in law. We, accordingly, answer the question referred to us in the negative. In the entire circumstances of the case, we wish to make no order as to costs.

IK/VGW/D.V.C

18. Answered accordingly.