Case: Commissioner of Income Tax (Central), Calcutta Vs. Daulatram Rawatmull

have reached those findings. This is so even if the High Court left to itself would on the evidence have reached a conclusion different from that of the Tribunal. The rules which govern the approach of the High Court are"(i) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the court under section 66(1).(ii) When the point for determination is a mixed question of law and fact, while the finding of the Tribunal on the facts found is final, its decision as to the legal effect of those findings is a question of law which can be reviewed by the court.(iii) A finding on a question of fact is open to attack under section 66(1) as erroneous in law when there is no evidence to support it or if it is perverse.(iv) When the finding is one of fact, the fact that it is itself an inference from other basic facts will not alter its character as one of fact."Mr. Sastri says that the income-tax authorities had found the following facts(1) that the three deposits were made in quick succession, and the deposits in the name of Raghunath Prasad Agarwalla and B. N. Gupta were in fact held by the Tribunal as representing "secreted profits" of the assessee ;(2) that the three deposits were in the same bank in the same Indian State and at the same branch and were made in similar circumstances ;(3) that the same modus was adopted for making overdraft arrangements in British India in respect of the three deposit receipts with the aid of these " secreted funds ";(4) that the names utilised for making the deposits were of the sons of the three partners of the assessee ;(5) that the source of the fixed deposits was clouded in obscurity and that the deposits could not represent bona fide transactions. If it was so intended, a loan could have been directly. advanced to Sri Hanuman Sugar Mills Ltd. by Sheo Prasad Agarwalla, instead of adopting the circuitous method involving payment of large amount of interest and commission charges to the Central Bank of India ;(6) that the assessee had denied connection with Sri Hanuman Sugar Mills Ltd., but the record disclosed that a large amount exceeding Rs. 8, 00, 000 was advanced to Hanuman Investment Ltd.---managing agents of the Sugar Mills Ltd. and the entire amount so advanced had ultimately found its way into the account of the Sugar Mills. Out of the six partners of the assessee three were directors of Sri Hanuman Sugar Mills Ltd. and the Sugar Mills Ltd. was under, the control of the assessee firmThese facts Mr. Sastri contends are capable of only one inference, viz., that the deposit in the name of Sheo Prasad Agarwalla was of the assessee and represented its " secreted profits " and any conclusion contrary thereto must be regarded as perverse. We are unable to agree with that contention5. The High Court exercises an advisory jurisdiction under section 66 of the Indian Income-tax Act. Only a question which arises out of the order passed by the Appellate Tribunal can be referred by that authority under section 66(1) of the Indian Income-tax Act and if the Tribunal declines to state a case, the High Court if it is not satisfied of the correctness of the decision of the Tribunal may require the Appellate Tribunal to state a case and to refer it. But the High Court has no power to call upon the Tribunal to state a case, if there is some evidence to support the finding recorded by the Tribunal, even if it appears to the High Court that on re-appreciation of the evidence, it might arrive at a conclusion different from that of the Tribunal.6. It cannot be said that the conclusion recorded by the Tribunal on the facts brought to our notice by Mr. Sastri is perverse. The Tribunal has rightly pointed out that the similarity of the transactions in respect of the three deposit receipts and the proximity of time were matters which may raise suspicion and this suspicion may be strengthened because Sri Hanuman Sugar Mills Ltd. was the ultimate beneficiary of the amount deposited on October 11, 1944, and the deposit was apparently obtained in the name of Sheo Prasad Agarwalla benami for the real owner. But these facts did not justify an inference that the assessee had anything to do with the deposit of Rs. 5, 00, 000 out of its " secreted profits ". The circumstances relied upon fail to establish the one link which must be established by evidence that the assessee was concerned with the transaction of the deposit made on October 11, 1944. It may be noticed that the amount of Rs. 5, 00, 000 deposited on November 8, 1944, in the name of Raghunath Prasad Agarwalla together with the interest thereon was brought into the account of the assessee. Even the connection of the assessee with the deposit dated November 21, 1944, was indicated by the letter of guarantee and the " letter of continuity " signed by Raghunath Prasad Agarwalla and B. N. Gupta and from the fact that on the security of the two deposit receipts an overdraft account was opened on November 24, 1944. But in respect of the deposit made on October 11, 1944, no such connection appears. We are not in this case called upon to consider whether any question of law arises from the finding of the Tribunal in respect of the two deposit receipts in the names of Raghunath Prasad Agarwalla and B. N. Gupta, but it would be impossible to hold that the finding of the Tribunal in respect of the deposit made on October 11, 1944, in the name of Sheo Prasad Agarwalla was so perverse that no reason able body of persons properly instructed in the law could have reached it.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We are unable to agree with that contention5. The High Court exercises an advisory jurisdiction under section 66 of the IndianAct. Only a question which arises out of the order passed by the Appellate Tribunal can be referred by that authority under section 66(1) of the IndianAct and if the Tribunal declines to state a case, the High Court if it is not satisfied of the correctness of the decisionof the Tribunalmay require the Appellate Tribunal to state a case and to refer it. But the High Court has no power to call upon the Tribunal to state a case, if there is some evidence to support the finding recorded by the Tribunal, even if it appears to the High Court that onof the evidence, it might arrive at a conclusion different from that6. It cannot be said that the conclusion recorded by the Tribunal on the facts brought to our notice by Mr. Sastri is perverse. The Tribunal has rightly pointed out that the similarity of the transactions in respect of the three deposit receipts and the proximity of time were matters which may raise suspicion and this suspicion may be strengthened because Sri Hanuman Sugar Mills Ltd. was the ultimate beneficiary of the amount deposited on October 11, 1944, and the deposit was apparently obtained in the name of Sheo Prasad Agarwalla benami for the real owner. But these facts did not justify an inference that the assessee had anything to do with the deposit of Rs. 5, 00, 000 out of its ";. Thecircumstances relied upon fail to establish the one link which must be established by evidence that the assessee was concerned with the transaction of the deposit made on October 11, 1944. It may be noticed that the amount of Rs. 5, 00, 000 deposited on November 8, 1944, in the name of Raghunath Prasad Agarwalla together with the interest thereon was brought into the account of the assessee. Even the connection of the assessee with the deposit dated November 21, 1944, was indicated by the letter of guarantee and the " letter of continuity " signed by Raghunath Prasad Agarwalla and B. N. Gupta and from the fact that on the security of the two deposit receipts an overdraft account was opened on November 24, 1944. But in respect of the deposit made on October 11, 1944, no such connection appears. We are not in this case called upon to consider whether any question of law arises from the findingof the Tribunalin respect of the two deposit receipts in the names of Raghunath Prasad Agarwalla and B. N. Gupta, but it would be impossible to hold that the findingof the Tribunalin respect of the deposit made on October 11, 1944, in the name of Sheo Prasad Agarwalla was so perverse that no reason able body of persons properly instructed in the law could have reached it.