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TMI Blog1973 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... tner in a firm, M/s. Roller Supply Company, and also derived income from letting out on hire some rollers of his own. During the assessment proceedings, the Income-tax Officer found that a plot of land had been purchased in the name of the assessee's wife, Smt. Ganesh Devi, in the year 1951-52 for Rs. 14,724 and that a house had been constructed on the said plot, the construction having commenced in February, 1952, and completed in March, 1954. The Income-tax Officer found that the assessee had not withdrawn any sum for the construction of the said property. He, therefore, called upon the assessee to explain the source from which the cost of construction was met. The assessee thereupon filed a certificate from an architect according to which the cost of construction was Rs. 59,704. As regards the source of the money for the construction of the house, the assessee in his letter to the Income-tax Officer dated November 24, 1957, explained that the cost of construction of the house was met by his wife by the sale of her ornaments. On further elucidation being sought, it was stated before the Income-tax Officer that just before the assessee came from Lahore in 1947, he had converted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and that the alleged sale of gold could not be held to be proved. The Tribunal further held that even if it be taken that the gold was sold to Ram Parkash Vinay Kumar the alleged source of acquisition of the gold was unproved and was not worthy of any credence. The Tribunal further held that the explanation of the source from which the assessee gave the money to his wife having been rejected as being false and untenable, the revenue authorities were under the circumstances justified in including the amount in question in the assessment year of the assessee as income from undisclosed sources. The Tribunal also agreed with the income-tax authorities regarding the estimate of the cost of construction at Rs. 84,000. The Tribunal, therefore, sustained the above addition of Rs. 42,000 in the assessee's income for the assessment year 1954-55. With regard to the first question referred to us Shri K. R. Bajaj, learned counsel for the assessee, has raised a two-fold contention, namely, (i) that the Tribunal was not legally justified in rejecting the evidence adduced by the assessee in support of the source of the cost of construction of the house, and (ii) that even if the Tribunal did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tervene if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory of it, or it has acted on material partly relevant and partly irrelevant or where the Tribunal draws upon its own imagination, imports facts and circumstances not apparent from the record, or bases its conclusions on mere conjectures or surmises, or where no person judicially acting and properly instructed as to the relevant law could have come to the determination reached. In all such cases the findings arrived at are vitiated." We may also refer to another judgment of the Supreme Court in Commissioner of Income-tax v. Daulat Ram Rawatmull , in which it was held as follows at page 351 : " Findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come ; and this is so, even though the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction was met by the sale of his wife's ornaments. The Tribunal noted that this explanation was at variance with the evidence actually adduced by the assessee, which was to the effect that his wife, Smt. Ganesh Devi, before leaving Lahore in 1947 had converted her savings which were in the form of cash into gold bars and that the gold bars had been sold in 1951 and the cost of construction of the house was met from the sale proceeds of the gold bars. Apart from the variation in the explanation, the Tribunal considered the explanation given by Smt. Ganesh Devi as improbable for the various reasons, namely, that there was no evidence to prove that any lands had been gifted to her by her father from which she could have derived income of Rs. 25,000 and that there was no evidence to show that she had saved Rs. 35,000 out of the money given to her for household expenses. The Tribunal also found it difficult to believe that Smt. Ganesh Devi would have thought it necessary to purchase gold with her savings and bring the gold into India instead of bringing the money itself which under the circumstances would have been easier for her to do. The Tribunal also gave cogent reasons f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5 lakhs belonged to B, but whether it belonged to the respondent-firm. The fact that B had not been able to give a satisfactory explanation regarding the source of Rs. 5 lakhs would not be decisive even of the matter as to whether B was or was not the owner of that amount. A person could still be held to be the owner of a sum of money even though the explanation furnished by him regarding the source of that money was found to be not correct. From the simple fact that the explanation regarding the source of money furnished by X, in whose name the money was lying in deposit, had been found to be false, it would be a remote and far-fetched conclusion to hold that the money belonged to Y. There would be in such a case no direct nexus between the facts found and the conclusions drawn therefrom. " The facts of this case are clearly distinguishable from those of the case before us. As already stated, there were six partners of the assessee-firm and the fixed deposit was in the name of one of them. The rejection of the explanation offered by the partner in whose name the deposit was found would obviously not justify the conclusion that the amount belonged to all the partners of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant accounting year. The rule laid down by the Kerala High Court cannot, therefore, be held to be applicable to the present case. The Kerala High Court was in fact applying the rule laid down by the Supreme Court in the earlier cases, namely, Govindarajulu Mudaliar v. Commissioner of Income-tax. Kale Khan Mohammad Hanif v. Commissioner of Income-tax and Commissioner of Income-tax v. Ganapathi Mudaliar. In the case of Govindarajulu Mudaliar, the Supreme Court held that : " Where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. Where the explanations of the assessee as regards amounts shown in the account books of a firm of which he was a partner, as credits from him, were rejected as untrue, it was open to the Income-tax Officer and the Appellate Tribunal to hold that they represented the concealed income of the assessee. " In Roshan Di Hatti v. Commissioner of Income-tax, a Division Bench of this court applied the rule laid down by the Supreme Court in Govindarajulu Mudaliar's case, and the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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