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TMI Blog1965 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee on behalf of a third party and it was a revenue receipt of the assessee ? " We are here concerned with the two assessment years 1952-53 and 1953-54, the relevant assessment years being Maru years 2007/8 and 2008/9. The assessee is a registered firm and, at the material time, was carrying on business in cloth including export of fine and super-fine cloth. There was import duty leviable on the cotton imported into India which was being used for manufacture of fine and super-fine cloth. As a result of representation made by various traders, the Government of India decided to allow some rebate on customs duty in respect of foreign cotton on which import duty had been paid and which had been used for the manufacture of fine and super-fine cloth. By a circular letter dated 8th March, 1950, the Government of India declared that with a view to encourage export of fine and super-fine cloth of Indian manufacture, it decided to grant from February 1, 1950, a rebate, out of the import duty paid on foreign cotton which had entered into the production of such cloth, at a flat rate of 2 annas per pound on the net weight of all such export to certain specified countries. The said lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to admit that the assessee-firm have no intention of returning the said amount to the mills and, therefore, the amount is nothing but the income of the firm. Since this amount was received by the assessee or accrued to them during the previous year, it has to be rightly included in the total income pertaining to this year." The assessee filed appeals before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner also it had been contended on behalf of the assessee that the said amounts of rebate received by the assessee were its liability to the mills and not its income, and therefore, not liable to tax. In support of its claim, the assessee had placed reliance on Morley v. Tattersal. The Appellate Assistant Commissioner also rejected the claim of the assessee and dismissed the appeals. Further appeals were taken to the Income-tax Appellate Tribunal. On the material placed before it, the Tribunal took the view that the real arrangement between the mills and the assessee was that the amount of rebate or refund belonged to the assessee. In this view of the matter, the Tribunal held that the said amounts were income of the assessee and not its liability, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Assistant Commissioner's order, which has been reproduced in the statement of the case, it appears that the import duty which the mills had paid for importing cotton was passed on by the mills to the exporters at the time of the sale of the cloth, and, therefore, the mills had no right to claim back the amount of rebate. We are, therefore, unable to raise any inference that in granting rebate there was any intention on the part of the Government that the exporters should hand over the amount to the mills. Now, it is indeed true that the copies of the contracts which have been produced contain either as a term or as a footnote that the assessee would pay the amount of rebate to the mills, in case it is received. It is this endorsement which was the basis of the claim of the assessee, in support of its contention that the amounts of rebate were received by it on behalf of the mills. The other piece of evidence which the assessee had tendered before the income-tax authorities consisted of letters from some of the mills to the assessee in which the mills had claimed from the assessee the payment of the rebate. The third piece of evidence on which the assessee had placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the department was that the real agreement between the mills and the assessee was that the amount belonged to the assessee and not to the mills, though there was a term or an endorsement to that effect in the forms of the written contracts which had been produced by the assessee before the Income-tax Officer. The question, therefore, which the Tribunal proceeded to consider was what was the real agreement between the parties, and had come to the conclusion, as stated above, that the real agreement between the parties was that the amount of rebate belonged to the assessee, and the finding, which, in our opinion, is a finding of fact, has not in any manner been vitiated. The material evidence which had been placed before the income-tax authorities and the Tribunal on behalf of the assessee was the agreement and the claims made in two cases by the mills for the return of rebate. That material had been taken into account by the Tribunal. The Tribunal also had taken into account the material which had been placed before it on behalf of the department principally that the amounts of rebate from time to time received by the assessee were not credited in the accounts of the mills, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, these two facts completely render the evidence tendered on behalf of the department a nullity. We find it difficult to accept such a proposition. The evidence tendered on behalf of the assessee and the evidence tendered on behalf of the department were pieces of evidence on which the Tribunal had reached a conclusion. The Tribunal came to the conclusion. There was evidence to support the conclusion reached by it. We are not sitting in appeal over the order of the Tribunal to ascertain whether the finding of fact recorded by the Tribunal is correct or not. All that we are concerned with is whether there is any evidence in support of that conclusion of the Tribunal, or whether the finding of the Tribunal is, in the circumstances, perverse. In our opinion, as discussed above, there is evidence. We also do not consider that the conclusion reached by the Tribunal is a perverse one in the circumstances of the case. On the finding reached by the Tribunal on this issue of fact, the Tribunal was justified in holding that the amounts of rebate was the income of the assessee. The two decisions on which reliance has been placed by Mr. Palkhivala are, in our opinion, distinguishable on f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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