1994 (3) TMI 80 - HC - Income Tax

Summary

Issues Involved:
1. Whether the sum of Rs. 4,00,000 was the assessable income of the assessee.
2. Whether the Tribunal's finding was unreasonable, perverse, or not sustainable in law.

Summary:

Issue 1: Assessable Income of the Assessee
The primary issue was whether the sum of Rs. 4,00,000 credited to the assessee's account was assessable as his income. The Income-tax Officer added this amount to the assessee's income as "income from undisclosed sources." The assessee contended that the amount was remitted by Messrs. Bengal Jute Mills Co. Ltd., Calcutta, for payment to Messrs. G. Yafi and Sons at Bombay, and he merely acted as an intermediary. The Tribunal initially confirmed the addition, but the Appellate Assistant Commissioner deleted it upon further examination and evidence. However, upon remand, the Appellate Assistant Commissioner confirmed the addition again, leading to an appeal to the Tribunal, which upheld the addition.

Issue 2: Tribunal's Finding
The Tribunal's finding was challenged as being unreasonable and perverse. The assessee argued that the source of the Rs. 4,00,000 was clearly established as coming from Messrs. Bengal Jute Mills Co. Ltd., and the payment to Messrs. G. Yafi and Sons was confirmed by Mr. Bajoria, a director of the company. The High Court noted that the Tribunal was satisfied about the source of the money but questioned the necessity of routing the payment through the assessee. The High Court held that the amount could not be treated as the assessee's income since it was remitted for a specific purpose and paid accordingly.

Conclusion:
The High Court concluded that the Tribunal's finding was perverse and unreasonable. The amount of Rs. 4,00,000 was not assessable as the income of the assessee. The question referred was answered in the affirmative, in favor of the assessee and against the Revenue. No order as to costs was made.