9911796707
TMI Blog1980 (9) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... a limited period, had visited the races with a friend since deceased, had consulted the books and lists of the Royal Calcutta Turf Club and had placed bets from his office with the said bookmaker, K. N. Chakraborty. Being examined by the ITO he stated that he did not remember the names of any of the winning horses or the fees charged for entering the race course. Being asked to produce the said K. N. Chakraborty and the latter's books the assessee sought to retract his earlier statements and by his letter dated 18th September, 1970, stated that he had placed his bets through his friend, one S.R. Paul. Pursuant to a summons issued under s. 131 of the I.T. Act, 1961, K.N. Chakraborty appeared before the ITO and deposed. He admitted the said transactions with the assessee but could not produce his books of account in support and stated that they had been lost by theft. He also admitted that his licence as a book-maker had not been renewed by the Royal Calcutta Turf Club in March, 1969, as he was a tax defaulter. The ITO obtained further statements from the assessee to the effect that he had never bet on horses except during the said period. The ITO also examined S. R. Paul who state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Being aggrieved by the order of the AAC, the revenue appealed to the Income-tax Appellate Tribunal. It was contended on behalf of the revenue in the appeal that the AAC had failed to appreciate the evidence which, did not prove the alleged winnings of the assessee. The assessee contended otherwise relying on the findings of the AAC. The assessee also referred to certain other orders of the Tribunal where the transactions with K. N. Chakraborty had been accepted as genuine. The Tribunal, after considering the respective contentions of the parties, set aside the order of the AAC and confirmed the assessment as made by the ITO mainly on the following grounds: (i) The assessee's story that he had won phenomenal amounts on the race course and then stopped attending the race meets altogether was unbelievable and particularly by reason of the discrepancies in the statements the assessee made at different times. (ii) K. N. Chakraborty was found to be involved in other cases in similar circumstances and his credentials had not been, accepted by the Tribunal in several orders. (iii) The dealings of Chakraborty with the assessee and other parties in cheques contrary to the norma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the revenue. 4. That payments were received from K. N. Chakraborty by account payee cheques. The assessee having thus discharged the initial burden, the onus shifted on to the revenue. No evidence or materials were brought in by the revenue to prove that the apparent was not real. The conclusion of the Tribunal that the assessee had won Rs. 1,58,250 on the race course was entirely unbelievable and false and was erroneous. Whether K. N. Chakraborty had lost his books of account or not or that some of the transactions of K. N. Chakraborty had been disbelieved or that the assessee having attained success in his betting had restrained himself from betting any further were irrelevant and the findings of the Tribunal based thereon were unreasonable and perverse. Mr. Roy Chowdhury also contended that the questions raised by the assessee had been reframed by this court and condensed into one question so as to bring out the real controversy between the parties and was not new question. In support of his contentions Mr. Roy Chowdhury cited the following decisions : Dhirajlal Girdharilal v. CIT [1954] 26 ITR 736 (SC). This decision was cited for the following observations of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the said deposit represented the concealed income of the assessee. This was upheld by the Tribunal. On a reference, this court held that there was no material before the Tribunal to hold that the said fixed deposit was the concealed income of the assessee. On a final appeal, the Supreme Court observed as follows (p. 360): "The onus to prove that the apparent is not real is on the party who claims it to be so. As it was the department, which claimed that the amount of fixed deposit receipt belonged to the respondent-firm even though the receipt had been issued in the name of Biswanath, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of Biswanath." CIT v. Best and Co. (P.) Ltd. [1966] 60 ITR I I (SC). This decision was cited for the following observations of the Supreme Court (p. 18): " When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the revenue, an adverse inference could be drawn against the assessee if he failed to put before the department material which was in his exclusive possession. This process is described in the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt also had the power to reframe a question so as to bring out the real issues between the parties. Central India Industries Ltd. v. CIT [1975] 99 ITR 211 (Cal). Following the decision of the Supreme Court in CIT v. Anusuya Devi [1968] 68 ITR 750, it was held by this court that a question may be reframed to clarify or to pinpoint the real issues or for similar other reasons. Mr. B. L. Pal, learned counsel for the revenue, contended on the other hand that the conclusion of the Tribunal was the cumulative effect of the materials considered by it, and such materials, should not be studied or examined in isolation but its total effect should be kept in view. If there was some evidence to support the findings of the Tribunal, this court should not interfere with such findings in its advisory jurisdiction. Mr. Pal submitted that as the assessee was claiming an exemption in this case on the ground that the receipts in dispute were his race winnings the onus necessarily lay on the assessee to prove the same. The question referred as reframed was a new question not asked for by the assessee and, therefore, this court should decline to answer the same. The assessee, in any event, had faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court observed in Sree Meenakshi Mills v. Commissioner of income-tax [1957] 31 ITR 28 (SC), a finding of fact does not alter its character as one of fact merely because it is itself an inference from other basic facts; but a finding on a question of fact is open to attack under section 66 as erroneous in law when there is no evidence to support it or if it is perverse or has been reached without due consideration of the several matters relevant for such a determination ...... We have read the order of the Tribunal as a whole and we are not unmindful of the observation made in the case of Homi Jehangir Gheesta [1961] 41 ITR 135 (SC), that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions." 4. CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC). Here the question was if the income derived by the assessee from forests by sale of timber was agricultural income and exempt from tax under the Indian I.T. Act, 1922. On a reference the Orissa High Court held that the onus was upon the revenue to prove that the income derived from the forest was chargeable to tax and it had failed to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Here the House of Lords laid down the principles for reasonable exercise of power by an authority. Several unreported decisions of this court, viz., Income-tax References Nos. 599 and 600 intituled M. M. Murarka & Co. v. CIT Income-tax References Nos. 15 and 16 of 1971 intituled Worth Trading Co. v. CIT and P. C. Sharma & Sons v. CIT. were also cited and relied on by the revenue. On the question of perversity two decisions of the Supreme Court in G. Venkataswami Naidu & Co. v. CIT [1959] 35 ITR 594 (SC) and CIT v. Rajasthan Mines Ltd. [1970] 78 ITR 45 (SC) were cited on behalf of the revenue. The revenue also contended that a decision based on material partly irrelevant would be vitiated as a misdirection in law and would not be perverse and in this context cited two decisions of the Supreme Court in CIT v. Indian Woollen Textile Mills [1964] 51 ITR 291 (SC) and CIT v. Radha Kishan Nandlal [1975] 99 ITR 143 (SC). It was next contended that a specific question had to be raised when the conclusion of the Tribunal was sought to be impugned as perverse. Such a question, it was contended, was not before the court. In this connection a decision of the Supreme Court in CIT v. Imperia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the order of the Tribunal. The revenue cited a decision of the Supreme Court in CIT v. Smt. Anusuya Devi [1968] 68 ITR 750. On behalf of the revenue the following decisions were also cited, CIT v. Turner Morrison &Co. Ltd. [1978] 114 ITR 505 (Cal), Shankar Industries v. CIT [1978] 114 ITR 689 (Cal), Reform Flour Mills (Pvt.) Ltd. v. CIT [1978] 115 ITR 598 (Cal). It is not necessary to deal with the above decisions in detail. In the instant case it cannot be said that the Tribunal did not consider any material on record. The case of the assessee was that he was never a regular punter and only in five race meetings between November, 1964, and February, 1965, he allegedly placed his bets and won Rs. 1,58,000. Neither before or after the said period he took any interest in racing nor did he bet. This case the Tribunal did not believe and did not accept. The Tribunal noted that on the 5th September, 1970, the assessee stated before the ITO categorically that he used to bet outside the race course from his office by instructing K. N. Chakraborty to bet on specific horses. Only a few days thereafter, i.e., on the 18th September, 1970, the assessee wrote a letter to the ITO giving ..... X X X X Extracts X X X X X X X X Extracts X X X X
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