1961 (1) TMI 12 - SC - Income Tax

Whether, on the above facts and circumstances of this case, there was any material before the Tribunal to hold that the assessee purchased gold in the year 1918 which he sold in the year under consideration and the sum of ₹ 72,523 represents the sale proceeds of such gold ? Held that - This was a perfectly simple case, in which a question of law hardly arose. The Tribunal had believed the assessee s word in view of his conduct and past history, such as they had been able to see. Where the assessee s statement is believed, there is obviously material on which the finding is based ; and to seek for other material is tantamount to saying that a statement made by an assessee is not material on which a finding can be given. In our opinion, the Tribunal having believed the assessee s statement, there was an end of the matter in so far as that fact was concerned, and if the finding was based upon a statement which was good material on which it could be based, no question of law really arose. However, treating the question as one of law, the answer is irresistible that there was material, viz., the statement of the assessee believed by the Tribunal, on which the finding could be given. the answer given by the High Court must be set aside, and the question answered in the affirmative. Appeal allowed.

Summary

Issues:
Assessment of father's income posthumously, interpretation of income sources, credibility of assessee's explanation, validity of tribunal's decision based on assessee's statement, sufficiency of material for tribunal's finding, adequacy of supplementary statement by tribunal, High Court's evaluation of tribunal's decision.

Analysis:
The Supreme Court judgment pertains to an appeal regarding the assessment of the deceased father's income by the legal representatives. The case involved a disputed amount of Rs. 72,523 credited in the father's name for the assessment year 1945-46. The assessee claimed it to be the sale proceeds of gold purchased in 1918, which was sold in the relevant year. The Income-tax Officer initially treated this amount as income from undisclosed sources, a decision upheld by the Appellate Assistant Commissioner but overturned by the Tribunal. The Tribunal accepted the explanation provided by the assessee, leading to the exclusion of the amount from assessment.

The Commissioner of Income-tax sought a reference, and the High Court of Calcutta directed the Tribunal to provide a supplementary statement regarding the examination of the assessee's personal history. The High Court scrutinized the case and criticized the vague responses in the supplementary statement. Ultimately, the High Court concluded that there was insufficient material before the Tribunal to support the assessee's claim of purchasing and selling gold in 1918.

The Supreme Court, however, disagreed with the High Court's assessment, emphasizing that the Tribunal's decision to believe the assessee's statement was valid. The Court highlighted that when an assessee's statement is accepted, it constitutes material for a finding, and seeking additional evidence beyond the assessee's statement is unnecessary. The Court opined that the Tribunal's reliance on the assessee's statement was justified, and there was no substantial legal question involved. Consequently, the Court set aside the High Court's decision and ruled in favor of the appellants, allowing the appeal with costs in both courts.

In conclusion, the Supreme Court's judgment underscored the significance of the Tribunal's discretion to rely on the assessee's statement as valid material for decision-making, dismissing the need for additional evidence when the statement is deemed credible. The Court's decision highlighted the Tribunal's authority to assess credibility based on the available evidence, reinforcing the principle that a factual finding based on the assessee's statement is legally sound and conclusive.