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TMI Blog1974 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of Rs. 10,000 alone. At the instance of the assessee the following two questions have been referred to this court for its opinion : "(1) Whether, on the facts and circumstances of the case, the provisions of section 34(1)(a) have been properly invoked ? " (2) Whether, on the facts and circumstances of the case, the decision of the Tribunal in confirming the treatment of the credit in the name of Kishenlal Roopchand as concealed income for the assessment year 1951-52 is based on materials ? " The circumstances under which the revision of assessment under section 34(1)(a) came to be made in the assessee's case may briefly be set out. In the course of assessment proceedings of one Pattu Padmanabha Chetty the Income-tax Officer noticed the following credit entries : --------------------------------------------------------------------------------------------------------------------------------------------------- Assessment Name in which Peak Interest year credit appeared amount --------------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. 1950-51 Champa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that he knew the assessee from 1949 though a statement of his that he took on rent a godown belonging to the assessee is untrue. He also admitted that Champalal was known to him. In the circumstances, there is nothing improbable in the assessee having borrowed the money and shown the credit as directed by Champalal. Besides all that, the money has been repaid by cheques and cash along with other borrowings. We are satisfied that the transactions are genuine and there is no room for adding the cash credit. " Thereafter, the Income-tax Officer took up the assessee's assessment for the assessment year 1951-52 for revision under section 34(1)(a) with a view to bring in the cash credits found in the accounts of Padmanabha Chetty which the Tribunal held to be true and genuine borrowings. This was objected to by the assessee on two grounds : (1) that the initiation of proceedings under section 34(1)(a) is invalid and the Income-tax Officer had no jurisdiction to reopen the assessment under section 34(1)(a) and (2), that in any event the credit entries found in the accounts of Padmanabha Chetty cannot be used against the assessee without further materials to conclusively show that P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's contention that the provisions of section 34(1)(a) can have no application. The learned counsel for the assessee contends before us that the materials on record cannot form a sufficient basis for a finding that the credit entries in Padmanabha Chetty's accounts really represented the assessee's lending transactions, that the materials on record did not in fact establish any connection between the asseessee and the credit entries found in Padmanabha Chetty's accounts and that the reasoning given by the Tribunal for excluding the two items of credit entries found in the name of Jayanthraj would equally apply to the credit entry found in the name of the assessee. Mr. Padmanabhan learned counsel for the assessee, has taken us through the various statements given by Padmanabha Chetty, Champalal Jayanthraj and Radhakrishniah on the basis of which the addition of Rs. 10,000 has been justified by the Tribunal, to show that these statements even if they are accepted, on their face value ate quite insufficient to establish any connection between the amounts credited in Padmanabha Chetty's Accounts with the assesses. A perusal of the statement of Padmanabha Chetty shows that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tage should also represent the borrowal from Champalal. We are not able to find any reason as to why the Tribunal did not attach any significance to this portion of the statement of Padmanabha Chetty. As a matter of fact, the Tribunal does not say one way or the other as regards the above statement. When Padmanabha Chetty himself says that all the amounts credited in his accounts were borrowed from the same person and there being no other evidence to show that the borrowals were from two different persons it is not possible to treat the entry relating to Rs. 10,000 on 29th September, 1950, alone separately as having been borrowed from a different person than Champalal, merely because the credit in relation to the said sum of Rs. 10,000 stands in the name of Kishenlal Roopchand. As has been explained by Padmanabha Chetty himself, the name Kishenlal Roopchand was found entered in Padmanabha Chetty's account only at the instance of Champalal who provided the funds. Therefore, the mere fact that the credit entry was found in the name of Kishenlal Roopchand cannot be used against the assessee especially in the face of the statement of Padmanabha Chetty that the said sum of Rs. 10,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances not apparent from the record or it bases its conclusions on mere conjectures or surmises or no person judicially acting and property instructed as to the relevant law could have come to the determination reached by the Tribunal. If any authority is needed for the above proposition, we shall refer to the decision in Commissioner of Income-tax v. S. P. Jain. In that case, the Supreme Court cited with approval the following passage from the judgment of Bhagwati J. in Omar Salay Mohamed Sait v. Commissioner of Income-tax : " 'We are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and it it arrives at its own conclusions of fact after due consideration of the evidence before it, this court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate which were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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