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TMI Blog1978 (2) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the same and they are genuine parties. The matter was gone into in detail previously also. They are assessed to tax and all payments to them have been made by cheques. They have their bank accounts and income-tax files and they are not related to any shareholder or director of the company. Obviously they are genuine parties and the transactions cannot be treated as income from undisclosed sources. All the papers will be produced if you so desire. In this connection we would like to draw your kind attention to our letter Nos. SEC/28/5 and SEC/28/6 both dated 20th July, 1965. The file number of Shri V. L. Chandi has already been given. Mrs.Rodrigues appeared before you and explained the position regarding her credit. We hope you will kindly complete the assessment. The delay in making the assessment has caused unnecessary troubles, which could have been avoided had the assessments been completed at an early date. The managing director is out of station and we are experiencing further difficulties for the same. We believe you will appreciate the position." The sums were said to be representing genuine hundi loans from hundi bankers taken in the ordinary course of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of assessees bringing in their own moneys through a broker's bank a/c. I have come across cases in which this gentleman has admitted having accommodated his clients. His failure to produce his books and satisfy the Income-tax Officer of his capacity to do business in this scale would naturally evoke suspicion. I am of the opinion that the Income-tax Officer was justified in treating this loan of Rs. 35,000 as the assessee's own income. 5. One significant feature of the assessee's dealings with Mr. Jethanand Madhavdas is that the hundi purja has been lost. The assessee had produced a confirmatory letter from the broker in which he has asked for return of the discharged hundi. If the borrowing was genuine, I do not see why the broker should ask for the return of the purja. For, the hundi is normally in the custody of the broker during the subsistence of the loan and it is returned to the borrower when the loan is discharged. The request for the return of the hundi paper shows that this is fictitious." The assessee thereafter went up in further appeal to the Tribunal. Before the Tribunal, however, the assessee did not challenge the first two items of Rs. 20,000 each with the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 and I.T.A. No. 3687 of 1966-67, in respect of assessment years 1960-61 and 1961-62, in the case of Advani Private Ltd. v. ITO, dated 15th June, 1966, and 18th August, 1966, respectively, wherein the matter regarding two hundi loans by the said two parties, viz., Narainsingh Amarlal and Jethanand Madhavdas had come up for consideration. In that case the Income-tax Officer did not accept the submission of the assessee and had added back the loans as the assessee's income from undisclosed sources. In those cases, the Tribunal, after considering the facts and circumstances of the case, came to the conclusion that the loans were genuine and the said additions were not maintainable. As a matter of fact, the argument advanced by the departmental representative before us that it has not been established that the creditor was not in a position to advance the loan and in the absence of the assessee's failure to show that the creditor was a real person and that the credit represented a loan from such person, the addition was justified, was repelled by the said Benches of the Tribunal in the aforesaid orders. As a matter of fact, the creditors were the same as in the instant case and in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956] 30 ITR 181 the Supreme Court observed that facts proved or admitted might provide evidence to support further conclusion to be deduced from them which conclusions might themselves be conclusions of facts and such inference from facts proved or admitted could be matters of law. The court would be entitled to intervene if it appeared that the fact-finding authority had acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have come to the determination in question. Bearing the aforesaid principles in mind, we have, in the instant case, to examine the question posed before us. On behalf of the revenue it was contended that the assessee has not discharged the onus. In considering this contention, it may be relevant to remind ourselves of the observations of Lord Hansworth M.R. in the case of Stoney v. Eastbourne R. D. Council [1927] 1 Ch 367 at page 397 as follows : " It appears to me that there can only be sufficient evidence to shift the onus from one side to the other if the evidence is sufficiently prima facie to est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial status of the creditors were such that it was not possible for them to lend the amounts in question, a fact which must be borne in mind in considering the weight of the evidence adduced. Counsel for the revenue contended before us that the Tribunal has acted perversely because the Tribunal has admitted irrelevant materials and rejected the relevant materials and has thrown the onus wrongly on the revenue. What material is relevant or not relevant would again depend upon the facts and circumstances of each case. The Evidence Act embodies the principles of relevancy in s. 5 to s. 16 which, however, are not applicable to the proceedings with which we are concerned. But the principles that emerge from these sections is that anything which has a bearing on the question at issue before the judicial tribunal would be a relevant fact. Judged by that yardstick, we are unable to accept the position that in relying on the materials, mentioned or enumerated before, the Tribunal has admitted irrelevant materials, irrelevant in the sense that the materials which have no bearing on the question as to whether the loans in question were genuine or not or the parties were capable of lending t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 736, where the Supreme Court observed that when a court of fact acted on material partly relevant and partly irrelevant it was impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding. Such a finding of the court, the Supreme Court observed, was vitiated because of the use of inadmissible material and thereby an issue of law arose. With that principle, with respect, there cannot be any dispute. But, as we have noted before, in the facts and circumstances of the case, no infraction of that principle arises. Reliance was also placed on the observations of the Madras High Court in the case of A. D. Jayaveerapandia Nadar v. CIT [1964] 54 ITR 401. There also the court dealt with the facts in that case and it is not necessary, in the background of the present facts with which we are concerned, to deal with the said decision in detail. Our attention was also drawn to the observations of this court in the case of Sriram Jhabarmull (Kalimpong) Ltd. v. CIT [1967] 64 ITR 314 (Cal), where the court observed that the onus of proving that the cash credit entry appearing in the assessee's account books did not repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced anywhere else. There was no other evidence adduced by the assessee showing the position of the alleged creditors and their financial ability. The alleged creditors had made confessions before the respective ITOs who were assessing them that they had never lent these moneys though these allegations were not made in any proceedings in which the assessee was a party. But these statements were brought to the notice of the assessee who was given an opportunity to contradict or bring evidence contrary thereto. In those circumstances the Tribunal took the view that the assessee had not discharged the onus. This court held that such a view of the Tribunal could not be said to be perverse or an impossible view. It may be mentioned here that unlike the case referred to hereinbefore, in this case the assessee did give further evidence of the financial position of the alleged lenders and had given the income-tax file numbers which would prove prima facie the financial ability and the strength of the alleged lenders. In this case before us, there was no confession as such that the transactions in question with the assessee were fictitious and there was no question of such confession or sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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