1993 (9) TMI 48 - HC - Income Tax

Summary

Issues Involved:
1. Whether the Tribunal was justified in holding that the assessee's explanation regarding the nature and source of the sum of 3,57,000 Hong Kong dollars was not satisfactorily explained.
2. Whether the said sum was assessable as the assessee's income from undisclosed sources for the assessment year 1959-60.

Issue-Wise Detailed Analysis:

1. Justification of Tribunal's Holding on Assessee's Explanation:
The court examined whether the Tribunal had material to warrant its finding that the assessee's explanation was unsatisfactory. The Tribunal had ample material, including the balance-sheet seized by the Enforcement Directorate, showing 3,57,000 Hong Kong dollars as capital. The assessee's explanations were vague, unconvincing, and unsupported by cogent documentary evidence. The Tribunal carefully assessed the material facts and concluded that the explanation was not credible. The court noted that the Tribunal is the final fact-finding authority and its findings were not perverse, thus not open to reappraisal by the High Court.

2. Assessability of the Sum as Income from Undisclosed Sources:
The Tribunal treated the 3,57,000 Hong Kong dollars as income from undisclosed sources. The assessee contended that the balance-sheet was prepared for obtaining bank facilities and did not reflect the truth, claiming the amount represented unpaid goods and loans. However, this explanation was inconsistent and lacked documentary support. The Income-tax Officer and the Tribunal found the explanation improbable and the assessee failed to produce books of account for verification. The court affirmed that the Tribunal's view was reasonable and supported by evidence, and thus the sum was rightly assessed as income from undisclosed sources.

Conclusion:
The court answered the referred question in the affirmative, favoring the Revenue and against the assessee. The Tribunal's findings were based on substantial evidence and were not perverse, thus upholding the assessment of the sum as income from undisclosed sources. No order as to costs was made.