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TMI Blog1971 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay branch was the income of the firm, Kishinchand Chellaram, from undisclosed sources ?" The question relates to an amount of Rs. 1,07,350 which was remitted by telegraphic transfer from Madras to Bombay on 15th October, 1946, and was received at Bombay on 16th October, 1946. Messrs. Kishinchand Chellaram were assessed under section 23 of the Indian Income-tax Act and their assessment completed for the year in question on 30th June, 1951. They were assessed on ' an income ' of Rs. 26,43,573. Some time in 1955, however, the Income-tax Officer received certain information and commenced to make enquiries regarding the amount of Rs. 1,07,350. He wrote to the manager of the Punjab National Bank, Kalbadevi Branch, Bombay, asking for particulars of the remittance which had been received through that branch at Bombay. That letter is not on the record, but the bank manager's reply dated 18th February, 1955, has been reproduced verbatim in paragraph 2 of the statement of the case from a quotation thereof in paragraph 3 of the order of the Appellate Assistant Commissioner. The letter was as follows. " With reference to your above letter, we have to inform you that one telegraphic tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as from whom the T. T. was received by the Punjab National Bank, Bombay. They added that the information was required urgently and may be supplied " per bearer, Mr. Parsuram, the accountant of the firm. " To this query from the assessee the Punjab National Bank gave an important reply on 9th March, 1957, in which they stated : " We received one T. T. for Rs. 1,07,350 from our Madras officer on October 16, 1946, favouring Nathirmal. The amount was remitted by Messrs. Kishinchand Chellaram through our Madras office. The address of the payee as per our record is Guzdar House, Girgaum Road, Bombay. " After this letter was received from the Punjab National Bank, the assessee wrote a further letter to the Income-tax Officer stating that they (the assessees) were satisfied that " no such amount had been remitted by our office in Madras. " They, however, added that Nathirmal was a common name in their community and, therefore, requested the Income-tax Officer to give them the father's name of Nathirmal " to enable us to look into the matter further ". They also stated : " You will also kindly let us know as to who, on behalf of the firm, purports to have sent the T. T. from Madras. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hellaram, was at Hongkong at the time when the Income-tax Officer was making enquiries regarding the remittance of Rs. 1,07,350. Tilokchand Chellaram was at one time working at the Otacamund branch of the assessee's business run under the trade name of K. Chellaram. In Madras, however, this name has been given to another firm known as Kevalram Chellaram. The Appellate Assistant Commissioner held that it was Tilokchand Chellaram who had joined the Mount Road branch as manager a few days before the remittance on his transfer from Ooty branch, who was concerned with the remittance. It is not in dispute before us and is stated as a fact in the statement of the case also that the remittance from Madras was by payment of cash to the Punjab National Bank at Madras. Upon these facts the Appellate Assistant Commissioner took the view that the mere fact that the remittance was by an employee to another employee did not absolve the appellant from explaining and proving the nature and source of the remittance. He added that " the employees were no more than stooges in the appellant's hands ", a remark to which strong exception was taken in the arguments before us. When the matter was taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these inferences drawn against the assessee because the assessee was throughout completely in the dark, firstly, as to the name of the remitter of this amount, and, secondly, as to the name of the payee of the amount at Bombay. He has pointed out that the name of Tilokchand as the remitter of the money from Madras came to be known for the first time when an application was made to call for the T.T. application before the Appellate Assistant Commissioner. It was only when the T.T. application was received that the name of Tilokchand was disclosed for the first time. It was impossible, therefore, for the assessee to ascertain the true facts without knowing who the remitter was. Secondly, he pointed out that the same difficulty existed regarding the name of the payee, Nathirmal. 'it was disclosed for the first time in the Income-tax Officer's letter dated 4th March, 1955, and Nathirmal being a common name in the community to which the parties belonged, it was impossible to trace this Nathirmal without his father's name being known. The assessee made this clear to the Income-tax Officer in their letter dated 13th March, 1957, and asked for the father's name of Nathirmal. Counsel urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, that they had not been given an adequate opportunity to meet the evidence and the facts and circumstances relied on on behalf of the department, it was urged that no grievance at all had been made before the Appellate Assistant Commissioner or the Tribunal that an adequate opportunity had not been afforded, nor had the assessee made a grievance of it before this court by raising any question in respect of denial of opportunity to it. Therefore, it is not open to the assessee to canvass that point in this reference. Secondly, it was urged that there has been in fact no denial of any opportunity. As regards the contention on the merits, counsel on behalf of the department urged that the finding is a pure finding of fact reached concurrently by the three authorities below and that they have taken into account all the relevant circumstances. Such a finding does not give rise to any question of law and cannot be interfered with. A number of authorities have been cited on one or the other of the circumstances relied on by either party and on the question of burden of proof, which we shall presently discuss. The principal material or evidence upon which the decisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------------------------------------------------------------------------------- Nathirmal, 1,07,350 16-12-6 2-8-0 1,07,350 Guzdar House, 19-4-6 Girgaum Road, ------------------------- Bombay. 1,07,369-4-6 -------------------------------------------------------------------------------------------------------------------------------------------------- RECD.CASH " I request you to make the payment by wire entirely at my risk and on my responsibility and on the distinct understanding that no liability whatsoever is attached to the bank for any loss, injury or damage arising or resulting from delay in transmission, delivery or non-delivery, of the telegraphic message or for any mistake, omission or error in the transmission or delivery thereof or in deciphering the message or from whatever cause so ever or from its misinter pretation when received. -------------------------------------------------------------------------------------------------------------------------------------------------- PUNJAB NATIONAL Tilokchand, BANK, Broadway, c/o. M/s. K. Chellaram, Madras. 181, Mount Road, Applicant. RECIEVED 15th October, 1946. Rupees one lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion can be supported as it has been supported in their order. We may only set forth the important circumstances. It is not disputed that both Tilokchand who sent the money from Madras and Nathirmal who received it at Bombay were employees of the assessee, Messrs. Kishinchand Chellaram. In fact today that question is no longer open. It has been stated in paragraph 7 of the Tribunal's order that the fact that the remittance from Madras was received by an employee of the assessee in Bombay is not disputed. Indeed, the very question which has been framed for our decision postulates that the remitter as well as the payee of this remittance were both employees of Kishinchand Chellaram, the assessee. That is, therefore, an important circumstance which will have to be taken into account in weighing the probabilities. The amount remitted, moreover, is a fairly substantial amount of Rs. 1,07,350. It is a very large amount and the least that we can say is that it was probably not within the capacity of the two employees of the assessee to own that amount and remit it. On the other hand, it is only possible for a well-to-do business like that of the assessee to own such an amount and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money from Madras to Bombay one should have expected some enquiry from the assessee and some attempt at controverting the facts alleged. They knew that they had two employees by name Tilokchand. Though according to the assessees both these employees had left their service, they certainly knew that it may be suggested that it was either one of these two Tilokchands who was the remitter. There is not an iota of evidence to suggest that the assessee made any enquiries as to the whereabouts of these persons who were their employees. There is also nothing to show that the assessee made any enquiry from the bank manager other than what has been stated in their letter of 7th March, 1957, wherein all that they had asked was the full name and address of the person to whom the payment was made by the bank and the name of the bank in Madras through whom the telegraphic transfer was received. There is no doubt that the person who took away the cash from the bank at Bombay must either have been known to an officer or other employee of the bank or the bank must have sought identification of the person before they paid that person so large an amount, but no attempt seems to have been made to asc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants was accepted and the entries therein were not challenged " was relied on. That was said in a completely different context and upon the particular facts of that case. That was a case where the assessee was found to be in possession of high denomination notes which the assessee was unable to account for. The number of notes involved were 61 of Rs. 1,000 each and the tax authorities declined to accept the explanation of the assessee and held that the entire amount represented by these notes was the assessee's income from undisclosed sources. The Tribunal accepted the assesssee's explanation in regard to 31 notes and directed that the assessment against the assessee should be reduced by that amount. The High Court held that there was material before the Tribunal to hold that the sum of Rs. 30,000 represented the income of the appellants from undisclosed sources and, therefore, affirmed the order of the. Tribunal. The Supreme Court pointed out that, as the cash book of the appellants had been accepted and the entries therein were not challenged, nor further accounts or vouchers called for, nor the persons who gave the affidavits cross-examined, it was no longer open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that there are no entries relative to that item in the account books of the assessee. These circumstances are quite different from the circumstances in Omar Salay Mohamed Sait's case. As regards the principle that the Tribunal should not base its findings on suspicions, conjectures or surmises, we have already discussed the circumstances and we do not think that the finding in the present case is based on any suspicions, conjectures or surmises, nor do we think that any irrelevant circumstance has been taken into consideration. Several cases were cited for the proposition that where a finding of the Tribunal is not supported by any evidence at all, it gives rise to a question of law and the finding must be set aside. The principle is well-settled, but in the present case as we have shown not only is there ample evidence or other material relevant for consideration, which has been taken into account, but upon that evidence and that material the only conclusion possible was that the amount remitted in the instant case from Madras to Bombay belonged to the assessee. We need not, therefore, discuss these cases individually. It was also strenuously urged on behalf of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and against the assessee, has been considered fairly and with due care ; whether the evidence pro and con has been considered in reaching the final conclusion ; and whether the conclusion reached by the Tribunal has been coloured by irrelevant considerations or matters of prejudice." Applying these principles we have shown that the cumulative effect of the facts and circumstances as we have discussed above is clearly to support the conclusion of the Tribunal. We have already said that we do not find that they have taken into account any irrelevant considerations or matters of prejudice or based their findings on any conjectures, surmises or suspicions. Then we turn to the other contention advanced by Mr. Advani. The principal pieces of evidence in this case are the two letters dated 18th February, 1955, and 9th March, 1957, written by the bank manager to the Income-tax Officer and the assessee, respectively. We have already dealt with the attack against these two letters. It was further contended that there was no opportunity afforded to the assessee to counter the two letters, and we proceed to examine this contention. So far as the letter of 18th February, 1955, is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to their query. In Commissioner of Income-tax v. Smt. Anusuya Devya in meeting just such an argument as this, the Supreme Court remarked at page 757 as follows: " There is also no round for believing that Anusuya Devi was not given an opportunity to ' clear up the discrepancies ' between the statements made by her or on her behalf from time to time in connection with the encashment of the high denomination notes. That plea was not raised before the Tribunal, and the validity of the conclusion of the Tribunal on appreciation of evidence cannot be assailed before the High Court on the ground that departmental authorities had violated the basic rules of natural justice without raising that question before the Tribunal." The objection taken before us is also an objection on the ground of failure to observe the rules of natural justice and we think, therefore, that we must rule out the objection on the short ground that it was never taken before the Tribunal. At the hearing before us a copy of the letter dated 17th December, 1959, written by the manager of the Punjab National Bank to the Appellate Assistant Commissioner was produced as also the telegraphic transfer application da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fixed the date of hearing. It can hardly be said, therefore, that in the circumstances an adequate opportunity was not afforded to the assessee to meet that evidence, but as we have said even if no such opportunity had been given the assessee never raised any objection before the Tribunal and, therefore, cannot now be heard to urge it in the reference. On the whole, we are satisfied that the Tribunal came to a correct conclusion upon the material before it and there has been no failure to observe any rule of natural justice by not giving an opportunity to the assessee to controvert any material or evidence used by the tax authorities. In the result, we answer the question in the affirmative. The assessee will pay the costs of the Commissioner. By an order of this court dated 10th March, 1970, a further statement of the case was called for, but while passing that order the court had ordered that the costs of that hearing shall be costs in the reference. In view of the fact that it was no fault of the assessee that the additional facts contained in the supplementary statement of the case had not been incorporated in the original statement of the case, we think that the proper order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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