Ramaswami, C.J:— In this case the assessee Dalmia Jain and company limited is a private company incorporated under the Indian Companies Act. The assessee is the managing agent for various companies. It also carried on the business of purchase and sale of shares. The assessment year is 1948-1949 and the relevant accounting year is the year ending on the 31st of January, 1948. The assessee claimed that for this accounting year a sum of Rs. 4,25,000/- paid to Chimanram Motilal should be deducted as business expense. It was alleged that there was an oral agreement between the assessee company and Chimanram Motilal, and in pursuance of his oral agreement the assessee paid a sum of Rs. 4,25,000/- in full and final settlement of a law suit instituted by Chimanram Motilal against the assessee and also against Ram Krishna Dalmia. The suit was brought by Chimanram Motilal on the original side of the Bombay High Court. The suit was numbered as suit no. 1280 of 1943, and in that suit the assessee company was impleaded as the first defendant and Ramkrishna Dalmia as the second defendant. It was alleged in the plaint by Chimanram Motilal that as a result of a negotiation between Juthalal Motilal of the plaintiff's firm and Ramkrishna Dalmia it was agreed that in consideration of the financial assistance to be rendered by the plaintiff to the Dalmia Cement Company Limited and to the other concerns in which the second defendant (Ramkrishna Dalmia) was interested, he (Ramkrishna Dalmia) would admit the plaintiff as a partner with 3 annas share in the managing agency of the Dalmia Cement Limited, with effect from the 1st of January 1939.
2. it is said that Ram Krishna Dalmia also agreed that he would induce the assessee company to enter into a written agreement, agreeing to give to the plaintiff as from January 1939, a 3 annas share in the commission earned by the assessee company as the managing agents of the Dalmia Cement Limited. It was further alleged that the plaintiff prepared a draft agreement and the terms of the draft agreement were finally settled on the 19th of August, 1939, in the office of the solicitors Mulla and Mulla of Bombay in the presence of Juthalal Motilal on behalf of the plaintiff firm and Jaidayal Dalmia a Director of the assessee company on its behalf. Under the terms of this draft agreement the firm of Chimanram Motilal agreed to deposit with the assessee company a sum of Rs. 10,00,000 and allow the said amount to remain in deposit with the assessee company so long as it continued to be the managing agents of the Dalmia Cement Limited. In consideration of the deposit, the assessee would pay interest at the rate of 6 per cent on the amount deposited and also 3/16th of the managing agency commission received from Dalmia Cement Limited. The plaintiff prayed for the following reliefs in the suit.
“(a) That the 1st defendant company may be ordered to execute in favour of the plaintiff's with all the formalities an agreement in terms of the draft agreement Ext C. hereto and to do all acts necessary for and incidental to the said execution:
(b) That the 1st defendant company may be ordered to render an account of the profits earned by them as the Managing Agents of the Dalmia Cement Ltd., from and after the 1st of January 1939, whether such profits have been received by them or not;
(c) That the 1st defendant company may be ordered to pay to the plaintiffs a share of three annas from and out of the said profits with interest at 6 per cent per annum, thereon from the date on which the said share became payable to the plaintiffs under the terms of the said agreement.
(d) That in the alternative, the 1st defendant company may be ordered to pay to the plaintiffs a sum of Rs. 5 (five) lacs or such other sum as to this Hon'ble Court may seem just as damages for their breach of the said agreement with the plaintiffs.
(e) That in the event of the plaintiffs being held not to be entitled to the aforesaid reliefs against the 1st defendant company, the 2nd defendant may be ordered to pay to the plaintiffs a sum of Rs. five lacs or such other sum as to this Hon'ble court may seem just as and by way of damages for breach of his said agreement with the plaintiffs.
3. In the written statement the assessee company denied that here was any agreement effected between Chimanram Motilal and the assessee company. It was also denied that Ramakrishna Dalmia was authorised to enter into any agreement with Chimanram Motilal on its behalf, it was also denied that the plaintiff had deposited a sum of Rs. 10,00,000/- with the assessee company or with any other concern on its behalf. The second defendant, Ramkrishna Dalmia, admitted that there was negotiation between him and Chimanram Motilal for the supply of finance to the assessee company by giving to the plaintiff a share in the managing agency commission but Ramkrishna Dalmia alleged that the parties were not able to agree to the terms of the agreement there was no concluded contract between the parties. The suit did not come up for trial. There was apparently some negotiation between the parties for a private settlement & as a result a sum of Rs. 4,25,000/- is said to have been paid by the assessee Company to Chimanram Motilal and the suit was dismissed by the Bombay High Court with the consent of the parties. The claim of the assessee is that the amount of Rs. 4,25,000 should be deducted from its taxable profits under Section 10(2)(xv) of the Indian Income-tax Act. It was contended on assessee's behalf that the amount was paid to Chimanram Motilal in order to terminate an inconvenient trading relationship & the assessee was therefore entitled to claim the deduction u/s. 10(2)(xv) of the Indian Companies Act. The claim has been disallowed by the appellate Tribunal on the ground that there was no trading relationship between the assessee company and Chimanram Motilal. It was found by the Tribunal, upon an examination of the materials before it, that no money was ever advanced to the assessee company by Chimanram Motilal and there was not even an agreement for the supply of finance between the assessee company and Chimanram Motilal and there was therefore no commercial or trading relationship between the assessee company and Chimanram Motilal. The Tribunal further expressed the veiw that the memorandum of real agreement was not a bona fide document and was brought into existence subsequently with a view to promote the assessee's case in the income-tax proceedings. The conclusion reached by the Tribunal was that the payment of Rs. 4,25,000/- was not made by the assessee in order to get rid of any inconvenient trading relationship between the assessee company and Chimanram Motilal, but the payment was made in order to save Ramkrishna Dalmia who was the brother of Jaidayal Dalmia, Director of the assessee company.
4. As directed by the High Court under section 66(2) of the Indian Income-tax Act, the appellate Tribunal has stated a case upon the following questions of law.
“(1) Whether in the facts and circumstances of this case the amount of Rs. 4,25,000/- paid by the assessee to Messrs Chimanram Motilal is an expenditure wholly and exclusively incurred for purpose of trade and whether the assessee is entitled to claim deduction of this amount under S. 10(2)(xv) of the Act?
(2) Whether there is material, before the Appellate Tribunal for reaching the finding that the memorandum of the oral agreement dated 1-3-1947 was not a genuine document?”
5. As regards the first question the argument put forward on behalf of the assessee is that the appellate Tribunal had no justification for going into the merits of the case between the parties in the original suit, namely, suit no. 1280 of 1943, and to reach the finding that there was no agreement for the supply of finance between the assessee company and Chimanram Motilal and that no money was advanced to the assessee company by Chimanram Motilal on the basis of any such agreement. It was contended by Mr. Sampat Iyengar that the parties compromised the dispute, and as a matter of law the compromise of a disputed claim made bona fide is a good consideration for a promise even if the plaintiff's claim turns out ultimately to be invalid. In support of this proposition learned Counsel referred to Cook v. Wright, (1861) 121 ER 822 (A), Callisher v. Bischoffsheim, (1870) 5 QB 449 (B) & Jayawickreme v. Amarsuriya, 1918 App Cas 869 : (AIR 1918 PC 287) (C), Mr. Sampat Iyengar also referred to a passage from the judgment of Bowen L.J, in Miles v. New Zealand Alford Estate Co., (1886) 32 Ch D 266 at p. 291 (D) which is to the following effect:
“It is a mistake to suppose it is not an advantage, which suitor is capable of appreciating, to be able to litigate his claim, even if he turns out to be in the wrong. It seems to me it is equally a mistake to suppose that, it is not sometimes a disadvantage to a man to have to defend an action even if in the end he succeeds in his defence; and I think therefore that the reality of the claim which is given up must be measured, not by the state of the law as it is ultimately discovered to be but by the state of the knowledge of the person who at the time has to judge and make the concession. Otherwise you would have to try the whole cause to know if the man had a right to compromise it and with regard to questions of law it is obvious you could never safely compromise a question of law at all.”
6. I do not accept the argument of Mr. Sampat Iyengar as right. In the first place, the principle applies only if there is a compromise of a disputed claim made bona fide between the parties. Such an argument was not advanced on behalf of the assessee before the Tribunal at the time of the hearing of the appeal and there is no finding of the Tribunal whether the assessee company entered into the compromise bona fide or not. In the absence of such a finding it is difficult to accept the argument of the learned counsel for the assessee that there was a legally binding contract between the parties and that, the principle of the authorities like 1918 AC 869 : (AIR 1918 PC 287) (C); (1870) 5 QB 449 (B) and (1861) 121 ER 822 (A) applies to the present case. In the second place, the question of the legal validity of the contract is quite irrelevant to the question presented for determination in this case. I shall assume in favour of the assessee that there was a binding contract between the parties and that the compromise was legally valid as between the parties. But the question at issue in the present case is different, namely, whether the assessee is entitled to claim the deduction as an expenditure laid out wholly and exclusively for the purpose of the business within the meaning of section; 10(2)(xv) of the Indian Income Tax Act, The compromise may be valid as between the parties to the transaction, but that question is irrelevant when the “tertius gaudens” in the shape of the income tax department comes on the scene and the question now presented for determination is quite different. In this connection I would refer to a passage from the judgment of Lord Greens in Commissioners of Inland Revenue v. 36/49 Holdings Ltd. (in Liquidation) (1943) 25 Tax Cas 173 (E) in a similar case.
“The true nature of the sum is not necessarily its nature in law, but its nature in business or in accountancy whichever way one likes to put it, because from the legal point of view there may be no difference whatsoever as between the parties between a capital and an income sum. It may be totally irrelevant to the legal relationships into which they are proposing to enter. When, however, the tertius gaudens, in the shape of the Revenue, appears on the scene, that matter which as between the parties may have been a matter of not the slightest importance becomes immediately a matter of very great importance, and it is necessary to examine the circumstances of each individual case, including any document which require to be construed, in order to ascertain what is the character to be attributed to the payment.”
7. The next argument on behalf of the assessee is that there is no material to support the finding of the appellate Tribunal that there was no agreement for the supply of finance between the assessee company and Chimanram, Motilal and that no money had been advanced to the assessee company by Chimanram Motilal. It was submitted by learned counsel for the assessee that the High Court had jurisdiction to interfere with the finding of the Tribunal on, this point. I do not think that this argument is correct. The Appellate Tribunal has considered and examined all the materials produced in this case on behalf of the assessee and then reached the conclusion that no money had been advanced to the assessee company by Chimanram Motilal and there was not even an agreement for the supply of finance between these parties. In paragraph 19 of its appellate order the Tribunal states that the materials produced by the assessee were the plaint, two written statements, the memorandum of oral agreement and also a copy of the personal account of Messrs Chimanram Motilal in the books of Dalmia Cement Limited. On the basis of these materials the Appellate Tribunal has reached the findings of fact, firstly that there was no agreement for the supply of finance between the assessee company and Chimanram Motilal, and secondly that no money had been advanced to the assessee company by Chimanram Motilal. I do not, therefore, accept the contention of Mr. Sampat Iyengar that the findings of the Appellate Tribunal are not based upon any material. There is also another important circumstance which has to be taken into account in this connection. It is well established that the burden of proving the necessary facts in order to claim, exemption under section 10(2)(xv) is upon the assessee. That is the view expressed by the Supreme Court in Commr. of Income Tax, Commissioner Of Income Tax, West Bengal v. Calcutta Agency Ltd. 1951-1919 I.T.R 191 : (AIR 1951 SC 108) (F). In the present case the tribunal has observed that the assessee had withheld important materials with regard to the question at issue. In paragraph 22 of its appellate order the Tribunal states that the assessee was required to file copies of the personal account of Chimanram Motilal in the books of Dalmia Cement Company and of the assessee Company, but the assessee did not produce copies of the account of Messrs Chimanram Motilal in its books. In these circumstances the Tribunal drew the inference that no money was advanced by Chimanram Motilal to the assessee company. The Tribunal also referred to the circumstance that the assessee did not produce any correspondence between it and Chimanram Motilal showing that there was any deposit of an advance or even suggesting negotiations for the supply of finance. The Tribunal also has stressed the important fact that no resolution of the assessee company had been produced in support of its contentions. The account of Messrs Chimanram Motilal in the books of Dalmia Cement Limited shows that the Dalmia Cement Limited received a sum of Rs. 5,00,000/- on the 1st March, 1938, for being passed on to Dalmia Cement and Paper Marketing Company Limited. The assessee company had, however, nothing to do with the Dalmia Cement and Paper Marketing Company Limited. The Tribunal has remarked that a balance of Rs. 1,303-12-3 outstanding on the 13th November, 1940 was transferred to the personal account of Messrs Sriram Harjimal, which was a Hindu undivided family of which Ramkrishna Dalmia was the Manager. There was a credit of Rs. 1,40,580-5-6 in the said account representing a transfer from the Karachi Branch of Dalmia Cement Limited on the 31st October, 1938. No copy of the personal account of Messrs Chimanram Motilal in the books of Dalmia Cement Limited, Karachi, had been produced. The Tribunal drew an adverse inference from the non-production of this account and held that the sum of Rs. 1,40,500/- and odd did not represent an advance made by Chimanram Motilal at all. The Tribunal also scrutinised the personal account of Chimanram Motilal in the books of Dalmia Cement Limited and held that there was nothing to show that any amount had been paid by Chimanram Motilal subsequent to April, 1939, to Dalmia Cement Limited. No letter or oral evidence was produced to indicate that even the advance made to Dalmia Cement Limited prior to April, 1939, had been made at the instance of the Assessee. Upon the available materials the Tribunal found that no money had been advanced by Chimanram Motilal to the assessee Company. As I have already stated, the burden of establishing the necessary facts for claiming an exemption under section 10(2)(xv) lies upon the assessee, and in the present case the assessee has failed to discharge this onus.
8. When a case involves a question of fact, the jurisdiction of the High Court to interfere with the finding of the Tribunal is of a very limited character. If the Tribunal decides a question of fact without any material at all, or if the Tribunal decides a question of fact by applying a wrong principle, the High Court has jurisdiction to interfere. Also in a case where the finding of the Tribunal is perverse, or if the finding is such that it cannot reasonably be entertained upon the material produced, the High Court would have jurisdiction to interfere with the finding of the Tribunal. It was observed by the Supreme Court in a recent case, Sree Meenakshi Mills Ltd. v. Commr. of Income-tax, Madras, 1937-31 ITR 28 : (AIR 1957 SC 49) (G) that the findings on questions of pure fact arrived at by the Tribunal would not be disturbed by the High Court on a reference unless it appeared that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they had come. In other words, the findings of the Tribunal can be reviewed only on the ground that there was no evidence to support it or that it was perverse. In a recent English case, Edwards v. Bairstow, 1956-28 ITR 579 (H) also it was stated by Lord Simonds as a universally accepted proposition that the court would interfere with a pure finding of fact if it appeared that the Commissioners had acted without any evidence or on a view of the facts which could not reasonably be entertained. Applying the principle to the present case, I am satisfied that the question at issue has not passed from the realm of fact into the realm of law and the High Court has no jurisdiction to interfere with the findings of the Tribunal on the question referred. The principle has been well stated by Lord Sterndale in Currie v. Commrs. of Inland Revenue, (1920) 12 Tax Cas 245 at p. 259 (I):
“The first question that has been debated before us is this: Is the question whether a man is carrying on a profession or not, a matter of law or a matter of fact? I do not know that it is possible to give a positive answer to that question, because it must depend upon the circumstances with which the Court is dealing. There may be circumstances in which nobody could arrive at any other finding than that what the man was doing was carrying on a profession, and therefore taking it from the point of view of a Judge directing a jury, or any other tribunal which has to find the facts, the Judge would be bound to direct them that on the facts that could only find that he was carrying on a profession. That reduces it to a question of law. On the other hand, there might be facts on which the direction would have to be given the other way. But between those two extremes there is a very large tract of country in which the matter becomes a question of degree: and where it becomes a question of degree, it is then undoubtedly, in my opinion, a question of fact; and if the Commissioners come to a conclusion of fact without having applied any wrong principle, then their decision is final upon the matter”.
9. In the present case I am not satisfied that the finding of fact reached by the Tribunal is based upon no material or that the finding is perverse. The High Court has, therefore, no jurisdiction to interfere with the finding reached by the Appellate Tribunal.
10. In the course of his argument Mr. Sampat Iyengar relied upon the decision of the Court of Appeal in Scammell and Nephew, Ltd. v. Rowles, (1939) 22 Tax Cas 479 (J). The question at issue in that case was that the assessee was entitled to deduct a certain amount paid for enabling it to terminate an inconvenient trading relationship. The question was decided in favour of the assessee by the Court of Appeal and it was held that the payments in question were made for the purposes of the assessee company's trade and accordingly they were allowable deductions in computing its profits for income-tax purposes.
11. The ratio of this case has no application to the present case. It is important to notice that the Special Commissioners had found in Scammell's case (J) that the amounts were paid by the company “for terminating a trading relationship”. On this finding the Special Commissioners took the view that the payments were not made wholly and exclusively for the purpose of the appellant Company's trade. In other words, the Special Commissioners took the view that a transaction entered into to get rid of a trading relationship was one which as a matter of law could not be for the purpose of the trade. The Court of Appeal reversed the finding of the Special Commissioners and held that the payments in question were made for the purpose of the appellate company's trade. At page 497 Sir Wilfrid Greene, M.R states as follows:—
“But, however that may be, let me take the Commissioners' finding exactly as it stands. They find that the object was two-fold, to enable Scammell to terminate the trading relation, and to enable them to do so “with the minimum sacrifice of the balance of account resulting from that relationship”. Now that is obscurely put; it presumably means, ‘to terminate the trading relationship and, while doing so, to get paid as much as they could of the balance of their account’. So far as the object of getting payment of the balance of their account is concerned, the effect of that part of it is, as I have said, that they were trying to get payment of something due to them on trading account. But the real weight of the argument that was put before us was on the point as to termination of trading relation, and it was said that where you have a complex relationship, two companies with interlocked boards, the chairman of one holding a controlling interest in the other, a management agreement made, a hiring agreement made, loans, debentures issues, and so forth and so on, a payment for the purpose of getting rid of that complex relationship is not one which can be said to be wholly and exclusively laid out for the purposes of the Appellant Company's trade.
It was also said that it was open to the Crown here to argue, as we were informed they had argued before the Commissioners, that, although the object of the payment might be for the purpose of trade, yet it was of a capital nature. It seems to me that, if we assume that the object was to terminate the trading relation, we must treat the matter giving proper force to the word ‘trading’. The relation to which the Commissioners are referring is a trading relation, and, therefore, in so far as there were any other relations which were not of a trading nature, the finding of the Commissioners negatives the idea that one of the objects was to get rid of them: It was trading relations, and trading relations only.
Therefore, we find this Company finding itself in a situation of trading relationship with another company which it wishes to get rid of because it is inconvenient to it. On that basis, and giving full force to the qualifying word ‘trading’, it seems to me that the conclusion to which the Commissioners have come, namely, that a compromise directed to obtaining the termination of such a relationship was not for the purposes of the Appellant Company's trade, is, with all respects to them, a complete non sequitur.
They seem to have thought that a transaction entered into to get rid of a trading relationship is one which, as a matter of law, could not be for the purposes of the trade. It looks as though they had thought that the compromise, if it had looked forward to some affirmative trading in the future, might have been regarded as for the purposes of the trade, but as, on the other hand, it was merely terminating the possibility of disadvantageous trading in the future, it could not be for the purposes of the trade. That seems to me, with all respects to them, to be quite wrong method of dealing with the matter. The termination of a trading relationship in order to avoid losses occurring in the future through that relationship, whether pecuniary losses or commercial inconveniences, is just as much for the purposes of the trade as the making or the carrying into effect of trading agreement. Therefore, I find myself in complete agreement with the view that Lawrence, J. took upon that matter.”
12. In the present case the findings of the Appellate Tribunal are entirely different. It has been found by the Appellate Tribunal that there was no trading relationship between Chimanram Motilal and the assessee Company and the payment was not a payment made in order to get rid of an inconvenient trading relationship. In view of this finding of fact of the Appellate Tribunal, I cannot accept the argument of learned Counsel for the assessee that the principle of Scammell's case (J) has any application to the present case.
13. The second question referred to the High Court is “whether there was material before the Appellate Tribunal for reaching the finding that the memorandum of the oral agreement, dated the 1st March, 1947, was not a genuine document?” It was submitted by learned Counsel for the assessee that the question of genuineness of the oral agreement was not argued before the Appellate Tribunal. In this connection learned Counsel referred to the application of the assessee under section 66(1). In paragraph 22 (b) of this application (page 26 of the paper book) it is mentioned that it was nowhere suggested during the course of the proceedings before the Income-tax Officer or the Appellate Assistant Commissioner that the memorandum of oral agreement was not a genuine document.
14. It was also said that “to the best of the recollection of the assessee” even the Departmental Representative did not question the genuineness of the oral agreement before the Appellate Tribunal. But I do not accept the case of the assessee that the point was not argued before the Appellate Tribunal, for in paragraph 18 of the appellate order the Tribunal expressly states that the genuineness of the oral agreement was challenged and that the Authorised Representative of the Department urged that the memorandum of oral agreement was not a bona fide agreement, but a document brought into existence for the purpose of claiming deduction of the sum of Rs. 4,25,000/- in the assessment of the Company. I do not, therefore, accept the submission of learned Counsel for the assessee that the point was not argued before the Appellate Tribunal.
15. It was then contended by Mr. Sampat Iyengar that there was no material to support the finding of the Appellate Tribunal that the memorandum of oral agreement was not a bona fide document but was brought into existence subsequently with a view to advance the assessee's claim to the Income-tax Department. In the course of its appellate order the Tribunal has given five reasons for reaching the conclusion that the oral agreement was not a genuine or bona fide document. In the first place, the Tribunal has referred to the circumstance that all the correspondence between the assessee and Chimanram Motilal took place through their respective solicitors, but the memorandum of oral agreement was not settled in the presence of the solicitors or through them.
16. In the second place, the Tribunal adverted to the circumstance that the agreement was not dated. On this point Mr. Sampat Iyengar referred to the agreement printed on page 30 of the paper-book as exhibit A. On page 31 the date 1st March, 1947, appears after the alleged signature of the plaintiff. Mr. Sampat Iyengar, therefore, argued that the Tribunal was wrong in holding that the memorandum of oral agreement was not dated. On this point Mr. R.J Bahadur made the submission that the memorandum of oral agreement printed on page 30 was prepared from a copy and not from the original document, and the copy was certified to be true by Mr. Haridutta, one of the Directors of the Company. Mr. Bahadur contended that no reliance would, therefore, be placed upon a printed copy of the oral agreement and there was no valid reason for doubting the statement of the Appellate Tribunal that the memorandum of oral agreement was not dated.
17. It was also pointed out by Mr. R.J Bahadur, Standing Counsel that no such objection was raised by the assessee in the application under section 66(1) or in the application under section 66(2) made before the High Court. I accept the submission of Mr. R.J Bahadur on this point and hold that there is no material to substantiate the contention of learned Counsel for the assessee that the Appellate Tribunal has committed any mistake of record. The Tribunal also adverted to the circumstance that the execution of the memorandum had not been proved by the oral examination of the executants of the document.
18. Lastly, the Tribunal has relied upon the circumstance that Chimanram Motilal was an uncle of Ramakrishna Dalmia, and Ramakrishna Dalmia was related to the share-holders of the assessee Company and that Jaideyal Dalmia, a Director of the assessee Company, was a brother of Ramakrishna Dalmia. The argument of Mr. Sampat Iyengar is that none of these materials can justify the Appellate Tribunal in reaching the conclusion that the memorandum of oral agreement was not a bona fide document but was brought into existence on a subsequent date. Learned Counsel referred to each of these materials mentioned by the Appellate Tribunal and contended that they were susceptible of inferences other than those drawn by the Tribunal.
19. He also offered explanation for each of the materials which would make it consistent with the contention of the assessee. But this method of approach is erroneous as has been pointed out by the Supreme Court in the recent case. 1957-31 ITR 28 : (S) (AIR 1957 SC 49) (G). It was pointed out in that case that when the Tribunal has reached a conclusion on an appreciation of a number of facts, the soundness of the conclusion must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting in the picture as a whole. At page 37 (of ITR): (at 55 of AIR) of the report Venkatarama Ayyar, J. has stated as follows:—
“Mr. P.R Das, learned counsel for the appellant did, at the start, put his contention as high as that. But it became abundantly clear when his argument began to unfold itself that it amounted to no more than this that the conclusion drawn by the Tribunal from the facts found by it was unsound and erroneous. He did not, it must be stated, dispute the facts themselves, but he took them one after another, and contended that they were susceptible of inferences other than those drawn by the Tribunal. He next offered explanation for them which would make them consistent with the contention of the appellant.
20. And he finally wound up by saying that the conclusion reached by the Tribunal was not justified. This clearly is an erroneous approach to the whole question. When a conclusion has been reached on an appreciation of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting in the picture as a whole. In 1956-28 ITR 579 (H), Lord Radcliffs stated:
“……..I think that it is rather misleading to speak of there being no evidence to support a conclusion when in cases such as these many of the facts are likely to be neutral in themselves, and only to take their colour from the combination of circumstances in which they are found to occur.”
21. In the present case also the cumulative effect of all the facts should be taken in their proper setting. That is the only correct legal approach to the issue and I am, therefore, of opinion that the finding of the Appellate Tribunal that the memorandum of oral agreement dated the 1st March, 1947, is not a genuine document is a reasonable finding of fact and is supported by proper material.
22. For the reasons expressed by me, I hold that both the questions of law referred by the Appellate Tribunal to the High Court must be answered against the assessee and in favour of the Income-tax Department. The assessee must pay the costs of this reference.
23. Hearing fee Rs. 250/-.
24. Raj Kishore Prasad, J.:— I agree.
D.H.Z
25. Answers against assessee.
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