Case: Commissioner of Income Tax, Bihar &amp; Orissa Vs. S.P. Jain

3. The assessee is an individual having income from salary, interest on securities, rents from house properties, dividends etc. In the year 1954-55 for which the previous year is 1st November, 1952 to 31st October, 1953, the assessee filed a return on 28th February, 1955 declaring a total income of Rupees 2,60,737/-. On 24th February, 1958 a revised return was filed including therein property income amounting to Rs. 550/-. The Income-tax Officer completed the assessment on 30th September, 1958 on a total income of Rs. 21,15,845/- which included a sum of Rs. 10,80,000/- treated as the assessees income from undisclosed sources "for investment in shares in the name of Sri Kalyan Shum Shere, J. B. Rana" (hereinafter referred to as the Rana). The assessee disputed the inclusion of this amount of Rs. 10,80,000/-. The Income-tax Officer treated this amount as income from undisclosed sources for the following reasons :-From the statement of case, it would appear that on July 1, 1952 the assessee sold 50,000 ordinary shares of Rhotas Industries Ltd. (R. I. Ltd.) to Dalmia Jain Collieries Ltd. (D. J. C. Ltd.). Another 10,000 shares of R. I. Ltd. were sold on the same day to Maheshpur Collieries (M. C. Ltd.). He also sold 40,000 and 35,000 ordinary shares of S. K. G. Sugar Ltd. the former to D. J. C. Ltd. and the latter to M. C. Ltd. on the same day, viz. 31st July 1952. Thereafter, in the year 1953, the two vendor companies are alleged to have sold these shares for a sum of Rs. 10,80,000/- to one Rana as follows :-(a) On 30th May 1953 the D. J. C. Ltd. sold 40,000 ordinary shares to S. K.G. Sugar Ltd. for Rs. 3,20,000/-. Again on 28th August, 1953, the D. J. C. Ltd. sold 50,000 ordinary shares to R. I. Ltd., for Rs. 4,00,000/-;(b) On 30th May, 1953, M. C. Ltd. sold 35,000 ordinary shares of S. K. G. Sugar Ltd. for Rs. 2,80,000/-; and on 28th August, 1953, the same company sold another 10,000 ordinary shares to R. I. Ltd. for Rs. 80,000/-4. The shares were delivered allegedly to Rana by Mr. J. F. Wood, General Manager of the Allahabad Bank after collecting the sale price of Rupees 10,80,000/- in cash paid on 30th May, 1953 and 28th August, 1953 and that the sum so received was given as loan to one Sri Durga Prasad of Tumsar through Sri J. F. Wood who paid to him the two amounts aggregating to Rs. 10,80,000/- on the respective dates against two promisory notes and receipts5. Though the Rana is shown to have purchased the shares in May and August 1953, he got them transferred to his own name only in April, 19556. On the material on record the Income-tax Officer came to the following conclusions :-"(i) The Rana could not be contacted at 22. Circus Avenue, Calcutta. The Inspector of the Department found that the tenant of the first floor of 22, Circus Avenue Calcutta was some one else and that the flat had never been let out to the Rana(ii) The Income-tax Officers own personal enquiries showed that the Rana could never have been in a position to invest a sum of over Rs. 10 lakhs in the shares in question(iii) Neither the two vendor companies nor the Rana nor Sri Durga Prasad of Tumsar had any account with the Allahabad Bank at that time and the shares were not in the Banks custody. The letter of Mr. J. F. Wood confirming the transaction did not appear in the Issue No. of the Bank and no office copy of the letter was forthcoming in the bank A person with sufficient financial influence with the Bank alone could have brought about such a transaction and the Rana should therefore be a benamidar(iv) Though the Rana is alleged to have purchased shares in May and August, 1953 the Rana had never attended any general meeting of the shareholders nor appointed any proxy to attend in the general meeting on his behalf(v) R. I. Ltd. declared dividends on 2nd June 1954 and S. K. G. Ltd. on 23rd April 1954. The dividends in all amounted to Rs. 21 lakhs but the Rana did not take steps to have the same recorded as the registered shareholder and to collect the dividends(vi) The Rana opened a current account in Allahabad Bank in April 1955 with a cash deposit of Rs. 500 and the dividends were then collected by the bank. During April to December, 1955 deposits were over Rs. 22 lakhs and withdrawals Rs. 20 lakhs. During the calendar year 1955 the deposits were Rs. 14,97 lakhs and withdrawals Rs. 16,85 lakhs; in the calendar year 1957 there was one deposits of Rs. 1,30,125 and withdrawal of Rs. 1,41,000/-. All these deposits were by cheques and withdrawals involving over Rs. 38 lakhs in the three years were all by bearer cheques and endorsed in favour of Ananta Chandra Das. Along with the cheques letters of authorisation were also issued in his favour. Excepting for the signatures of the Rana, the other entries in the cheques were in different handwriting and the authorisation letters were all typed in identical form. Ananta Chandra Das was found to be a representative of Sri B. D. Dujari. Accountant of Ashoka Marketing Ltd. and one of the lieutenants of the assessee(vii) The vendor companies and the companies whose shares were sold, namely, of R. I. Ltd. and S. K. G. Ltd. all belonged to Sahu Jain Group and under the complete control of the assessee, who is the heard of Sahu Jain Group. Since it was not likely that the assessee could afford to allow these shares pass out of his control to an outsider the transaction of purchase of the shares from the vendor companies would have been by the assessee in the name of the Rana"7. On 28th February, 1958 the Income-tax Officer informed the assessee that on the basis of information available with him, he had reason to believe that the Rana was the assessees benamidar in the transaction of purchase of the shares in question for Rs. 10,80,000/- from the two vendor companies and called upon the assessee to state his objections, if any, to adduce evidence in support of his contentions and also to produce the Rana before him. On 13th March, 1958 the assessee denied the purchase of the shares by him through the alleged benamidar. On 3rd September, 1958 the assessees accountant forwarded to the Income-tax Officer a statement or letter by the Rana, dated 26th August, 1958 confirming the purchase of shares by him. Since the assessee took no steps to produce the Rana for examination by the Income-tax Officer in view of "the utter uselessness" of the Ranas letter and in the absence of "necessary evidence and conclusive proof" about the Ranas financial capacity, the Income-tax Officer treated the sources of investment of Rs. 10,80,000/- as belonging to the assessee. The source not having been explained, the Income-tax Officer assessed the sum as the assessees income from undisclosed sources8. In appeal against the assessment, the Appellate Assistant Commissioner remanded the case to the Income-tax Officer as he found that the evidence of Sri Durga Prasad had been taken without giving any opportunity to the assessee to cross-examine him and that Anant Chandra Das was not examined, nor was any evidence of the officers, of the two vendor companies recorded. The Appellate Assistant Commissioner further directed the Income-tax Officer to examine the assessee and also to investigate the physical movement of the shares in question during the period covered by the transactions and the subsequent history including their ultimate disposal. It would appear from the Appellate Assistant Commissioners order that the Income-tax Officer submitted two remand reports in which he made out the following salient points :-(1) The assessee did not avail of the opportunity of producing the Rana(2) The Income-tax Officer visited Nepal and found that the present position and antecedents of the Rana were modest(3) Ananta Chandra Das was found to be an employee of Ashoka Marketing Ltd. Later, the Income-tax Officer succeeded in contacting Ananta Chandra Das whose statement was also recorded(4) The statement of Onkarmal Dalmia recorded on 9th December 1958 showed that the share scrips of the two companies involved, which were stated to have been purchased by D. J. C. Ltd. and Mahespur Collieries Ltd. were found to have been in the custody of the Accountant of the Ashoka Marketing Ltd(5) The Principal Officer of the two companies Shri H. D. Bisoni did not know about the transactions in question(6) Sri Durga Prasad changed his earlier statement and said that the loans received by him were from the two companies concerned(7) The sale to Rana was made at Patna below the market rates(8) Some details regarding the movement of the shares were noted by the Income-tax Officer but their subsequent history was not traced out(9) The statements of Sarvashree Onkarmal Dalmia, H. D. Bisoni the appellant, Ananta Chandra Das and Thakur Das Dujari were enclosed"9. After the receipt of the remand reports the Appellate Assistant Commissioner was of opinion that if the cumulative picture was visualised and considered not in isolation but generally as a whole, great weight has to be attached to the Income-tax Officers conclusion that the investment of Rs. 10,30,000/- was the assessees income from undisclosed sources. An appeal against this order was taken to the Income-tax Appellate Tribunal. The Tribunal declined to consider certain documents in Annexures D-1 to D-33 of the statement of the case. After rejecting these documents, the Tribunal found that "the purchase of shares by Rana was not a benami transaction" and was legally valid10. The conclusions of the Accountant Member which will be referred to as that of the Tribunal, so far as they are relevant for the disposal of this appeal have been stated by him as under :(1) At the relevant time in 1953 it was not in dispute that the two vendor companies were the actual owners of 75,000 ordinary shares of S. K. G. Ltd. and 60,000 ordinary shares of R. I. Ltd. The shares which the companies purchased were pledged with the Commissioner of Income-tax by the assessee and with his permission subsequently sold to the above companies(2) The transactions of sale by the vendor companies have been established according to the entries in the account books of the companies and by the factum of actual advance of loans amounting to Rs. 10,80,000/- to Durga Prasad who executed the requisite promissory notes in favour of the two companies. According to the evidence of Sri Durga Prasad and the letter of Sri J. F. Wood, General Manager of the Allahabad Bank the sale proceeds were received by him on behalf of the vendor companies from the Rana and paid over to Sri Durga Prasad after obtaining the promissory notes. It was not the departments case that Sri S. P. Jain had advanced Rs. 10,80,000/- to Sri Durga Prasad. The vendor companies did not have cash to make the advances except after the sale of the shares. From the facts recorded it followed that the two vendor companies effected the actual sale of shares in question and made the loans aggregating to Rs. 10,80,000/- to Shri Durga Prasad(3) Rana did not claim to be a tenant of 22, Circus Avenue, Calcutta. He had given his address as "Thepathali Darbar Nepal C/o Smt. Pooku Maiya Saheba, 22 Circus Avenue, Calcutta". In 1956, Rana seems to have been present at Calcutta and this fact had been confirmed in a letter to the Income-tax Officer dated 27th July 1956 by General Baber Shamshir J. B. Rana who stated that the Rana left his home (Nepal) some months back for treatment in India but he did not know Ranas address. The department had commenced its enquiries early in 1956 and at that time the Rana had substantial cash balances left in the Allahabad Bank. Since Rana never claimed to be a tenant and the departmental enquiries did not result in a positive finding that the Rana never stayed at No. 22 Circus Avenue, Calcutta, no adverse inference could be drawn against the assessee from the failure to contact the Rana. If it was a fact that the Rana had given a bogus address, his financial standing and credit could be assailed. As the facts stood the facts that the Rana could not be contacted at 22 Circus Avenue could not warrant an inference that the Rana was a benamidar(4) That the assessee had produced at the remand stage a letter dated 15th March 1959 from the Indian Ambassador, Nepal to the effect that the Rana was a person of large means and resources and enjoyed respectable position. The department did not take further action by seeking any clarification from the Indian Ambassador. He held that there was no material to hold that the Rana was not financially in a position to make the investment in question of over Rs. 10 lakhs(5) The Income-tax Officer drew an adverse inference that the Rana was a benamidar from the fact that the Rana did not get himself registered as a shareholder for nearly a year and did not promptly collect the dividends declared. The Tribunal thought that this was possible if Rana possessed sufficient means whereas if he was weak financially he would have tried to collect the dividends immediately on declaration(6) Ananta Chandra Das was ultimately located by the Income-tax Officer as an employee working in New Central Jute Mills. He was subjected to prolonged cross-examination by the Income-tax Officer in November and December 1962. It was not elicited from Ananta Chandra Das that the moneys collected by him from Allahabad Bank Ltd. against the cheques of the Rana were paid to the cashier or accountant of the Ashoka Marketing Ltd. or of any other concern under the assessees control. Ananta Chandra Das, on the other hand, specifically stated that the Rana utilised his services for getting the moneys from the Bank and the moneys were duly handed over to the Rana. Ananta Chandra Dass evidence failed to establish that the moneys collected from Allahabad Bank were for the assessees benefit11. The Judicial Member though he agreed with the main conclusions arrived at by the Accountant Member however added :-"The following circumstances of this case have caused serious doubts in my mind as to the bona fides of the transactions of the purchases or sales of these shares by the Rana (1) that there was no evidence of any negotiation for the sale of this huge lot of shares by the two colliery companies to the Rana. Certainly no brokers were involved; (2) That the two large sums of Rs. 6 lakhs and Rs. 4,80,000/- were handed over in cash by the Rana on 30th May 1953 and 28th August 1953 though admittedly the Rana had no bank account and no residence of his own in Calcutta where the cash could be kept in safety; (3) That though neither of the two colliery companies nor the Rana were constituents of the Allahabad Bank, yet the General Manager of the Bank actually handed over the purchase price and the share scrips respectively to the vendors and the purchaser and no reference could be found in the official records of the bank; (4) The unsatisfactory nature of the evidence given by Nandlall Poddar and (5) Lastly, the manner of withdrawal of nearly Rs. 37 lakhs in cash from the Allahabad Bank. Although the department has been able to point out the circumstances which raise an element of doubt as to the genuineness of the transaction of the purchases of these shares in 1953 by the Rana, in my opinion, the assessee has successfully rebutted any positive evidence produced by the department. I have a feeling that if the department had acted in time it could possibly have unearthed materials and evidence to strengthen and support this case. In spite of the serious misgivings in my mind I am constrained to hold that the department has failed to establish beyond reasonable doubt that the Rana acted merely as a benamidar in the purchase of these shares and also that he so acted on behalf of the assessee. Sri S. P. Jain. I therefore, concur with the order made by the Accountant Member"12. On the Tribunals findings, the following questions were referred to the High Court :-(1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in declining to consider the documents which were already on record and which the Department wanted to adduce as evidence ?(2) Whether on the facts and in the circumstances of the case, the Tribunals finding that the purchase of the shares by the Rana was not a benami transaction was legally valid ?(3) Whether on the facts and in the circumstances of the case the Tribunal was justified in deleting the sum of Rs. 10,80,000/- from the total income of the assessee by holding that the Rana was not the benamidar of the assessee ?The High Court confirmed the Tribunals conclusions on more or less similar reasoning which formed the basis of those conclusions.

Court's reasoning:
17. In this case the revenue had in its application under Section 66 of the Act asked for specific reference on the question:"Whether on the facts and in the circumstances of the case the finding of the Tribunal that a sum of Rs. 10,80,000/- paid for the purpose of the shares was not assessees own income was a perverse finding having regard to the evidence on the record ?"This question was repeated in its application under Section 66 (2) but perhaps the High Court thought that questions 2 and 3 on which it directed the Tribunal to state a case would cover the scope and ambit of question 3 on which the revenue had asked for reference. We think that the two questions on which the reference has been made impugn the finding and the validity of the Tribunals conclusion that Rs. 10,80,000/- was not an income from undisclosed sources, but was the product of a genuine sale by the vendor companies. Though this question does raise the validity of the finding given by the Tribunal, we have to ask ourselves the question, in what circumstances will this Court interfere with the finding given by the Tribunal or arrive at a different conclusions to that arrived at by it18. In our view, the High Court and this Court have always the jurisdiction to intervene 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 cosnclusions 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 finding arrived at are vitiated31. Another important factor to be considered is that after the shares were transferred in the name of Rana in 1955, Rana is said to have opened an account in his name in the Allahabad Bank and was said to be selling them in the market in lots and whenever their sale proceeds accumulated he would withdraw it by cheques. Nandan Lal Podar said, he introduced Rana to the Bank. It also appears that Podar was a Director and a close associate of the assessee. There is no discussion of this persons evidence by the Accountant Member though Judicial Member thought that it was unsatisfactory. In the course of one year i.e. from April, 1955 to 1956 Rana is alleged to have withdrawn large amounts by nine cheques aggregating to Rs. 38 lakhs. These cheques were said to have been sent for by Rana sitting at 11 Clive Row, Calcutta which is the address of the assessee and also of the Sahu Jain concerns. These cheques were bearer cheques for lakhs of rupees and encashed through one A. C. Das, peon of Ashoka Marketing Ltd. The letters of authorisation given to Das were typed in identical form bearing only the signature of Rana, the other entries having been filled up by someone else. These large amounts brought by A. C. Das in cash were handed over in the office of Sahu Jain concerns. A. C. Das states that he was directed to render this service for the Rana by T. D. Dujari, Dujari said that when he had gone to Jain (assessee) for office work the latter introduced him to Rana and asked Dujari to assist Rana if the latter so desired and that some days later Rana came to him with a request for a bearer to fetch money from the bank and that Rana himself handed the cheques to A. C. Das. The Judicial Member thought that this raises some doubt on the genuineness of Ranas transactions. The Accountant Member thought that the statement of A. C. Das was positive evidence and the Department had not produced any material to show that the moneys were actually withdrawn from the Bank and collected on behalf of the assessee. This again was an unreasonable assumption for the only way that fact could have been proved is to establish primary facts from which an inference that it was the assessee to whom the amount was paid could be drawn. It cannot be expected of A. C. Das, an employee of assessees concern and who was reluctant to appear before the Income-tax Officer to state that he in fact gave the money to the assessee. The Accountant Member however would have relied on that evidence for he says "if it had been established that A. C. Das was in the employ of Ashoka Marketing Ltd. in 1955-56, it would have cast a serious doubt about the acceptability of the evidence of A. C. Das". This observation overlooks the fact that A. C. Das in his deposition made on 18th December, 1962 stated that he used to receive pay from M/s. Ashoka Marketing Ltd. and in the Remand Report of I. T. O. dated 12th April 1963 it was observed that there was documentary proof that A. C. Das was an employee of the Ashoka Marketing Ltd. None of the contradictions in A. C. Dass evidence mentioned in the remand report dated 12th April, 1963 were adverted to or discussed by the Tribunal. It also did not notice that A. C. Das was really the assessees witness which is borne out by what was stated in that remand report that A. C. Das continued to be an employee of Sahu Jain Group of Companies, that he was ultimately found in the house of Sahu Jain at 11 Clive Row, Calcutta when a notice under Section 37 was served on him on 9th November 1962 asking him to appear on 12th November, 1962 and that he actually turned up on 17th November, 1962. Dealing with this aspect, the Income-tax Officer observed "this period of absence was rather meaningful." This has not been discussed or commented upon by the Tribunal nor has it considered any of the adverse circumstances referred to by the Income-tax Officer in his remand report in which he discussed the improbability of the story of the withdrawal of the moneys by A. C. Das as an agent of Rana32. We have already pointed out the improbability of the story of Durga Prasad that he received Rs. 10,80,000/- at the counter of the Allahabad Bank. The positive statement that the loan was given to him by the assessee and that he took this amount personally to Tumsar travelling in the Calcutta Mail, though retracted, was relied upon by the Income-tax Officer for the conclusion that this amount was lent by the assessee and it was income from undisclosed sources33. From the above discussion it is clear that the findings reached by the Tribunal are wholly vitiated. No judicial tribunal properly instructed could have arrived at those findings. We are therefore constrained to ignore those findings and re-examine the issues arising for decision on the basis of the material on record34. The question then is, whether the department has satisfactorily established that Rana was not the real purchaser of the shares and that he was a mere namelender.We have broadly stated the relevant facts earlier. We will now summarise the facts and circumstances - even at the risk of some repetition - which go to establish that the Rana was a mere namelender.They are :-1. There is no evidence to show that the Ranas financial position was such that he was in a position to purchase the shares in question. It is not shown that he had any bank balance either in this country or in any other country2. The Rana has not cared to appear before the authorities under the Act though several opportunities were afforded to him to do so for explaining the circumstances under which he purchased those shares3. The purchase price of the shares amounting to several lakhs of rupees was not paid by cheque or cheques. The same is said to have been paid in cash. This is a wholly improbable circumstance4. The Rana had not entered into any correspondence with the companies concerned for the purchase of the shares. He had not engaged the services of any brokers for making purchases. It is not shown how the Rana came to know that the companies in question were wanting to sell the shares5. It is not shown why the transaction in the said shares should have taken place in the presence of Wood. Wood had nothing to do with the transactions. Neither the Rana nor the companies which sold the shares had any dealings with the Allahabad Bank at the relevant time. The share scrips were not in the possession of the Allahabad Bank. The money was not paid through the Allahabad Bank. The letters of Wood on which considerable reliance was placed did not bear any office serial number. No copies of those letters were available in the Allahabad Bank. It is not explained how Wood came into the picture6. If Rana was the purchaser of the shares, he should have been in possession of the share scrips. They were his documents of title. We have earlier pointed out that the share scrips were in the possession of Ashoka Marketing Co. It is not explained how those scrips happened to be in the possession of the Ashoka Marketing Co7. Even after the alleged sale of the shares in favour of the Rana, Rana did not take any steps to have the shares registered in his name for nearly 11/2 years. This circumstance again is not explained8. The Rana did not care to collect the huge dividends that were declared in respect of those shares totalling about Rs. 2 lakhs for a year and half9. The Rana never cared to attend any general meeting of the company nor did he appoint any proxy on his behalf10. It was only when the price of those shares went up in the market and that when they had to be sold the Rana is said to have opened an account in the Allahabad Bank in which were credited sum of about Rs. 38 lakhs got by the sale of those shares. Practically all these amounts were said to have been realised by the Rana by issuing bearer cheques in favour of a peon of Ashoka Marketing Co. who had been casually introduced to him. The Rana could not have been too big to go to the bank to collect these huge amounts, if he was the real owner of the money. He is said to have waited in the premises belonging to Sahu Jain Co. and sent these bearer cheques through the said peon. It is further said that with a view to see that the peon did not misappropriate the money. Rana used to send his own driver with him. If that was so, it is not explained why Rana did not give the bearer cheques to his driver himself if the driver was so trustworthy and it is not explained what the Rana did with the money so collectedThe above enumerated circumstances are tell-tale. The only reasonable inference that can be drawn from those circumstances is that the Rana was a mere namelender.The conclusion reached by the Income-tax Officer and the Appellate Assistant Commissioner that the Rana was a mere name-lender is a reasonable conclusion. Neither the Tribunal nor the High Court has given any good reasons for rejecting those conclusions35. The next question is whether the department has established that the Rana was a benamidar for the assessee. As mentioned earlier, it is not sufficient if the department establishes that the Rana was the benamidar for somebody. It must go further and establish that the Rana was the benamidar of the assessee. There are good reasons to come to a conclusion that the Rana was the benamidar of the assessee. There are, as have been noted already :-1. The close association of the assessee with the Rana, which is evident from the record. It was the assessee who introduced the Rana to Nandlal who was a close associate of the assessee and it was Nandlal who introduced the Rana to the Allahabad Bank. Rana did not go to collect the money from the Allahabad Bank, but is said to have stayed in the premises of Sahu Jain Co., a company with which the assessee was closely associated and further a peon who gets the money from the bank was residing in the house of Sahu Jain. 11 Clive Row when the notice under Section 37 of the Act was served on him. According to this peon. A. C. Das, it was Dujaria who asked him to render that service to Rana. According to Dujaria it was the assessee Jain who introduced him to Rana and asked him to assist the Rana. It also appears from the evidence adduced on behalf of the assessee that the huge amount of about Rs. 38 lakhs collected by the Allahabad Bank was realised by the Rana by issuing bearer cheques to the above mentioned peon of Ashoka Marketing Co., an assessees concern. Further, it was the assessee who produced the so-called affidavit of the Rana but at the same time would not produce the Rana for examination for obvious reasons2. The D. J. C. Ltd. and M. C. Ltd., would not have sold suddenly the shares without any previous correspondence or without even informing the companys Secretary or Director, unless of course, there was intercession by some one who had influence over those companies3. There is no admissible evidence to establish that Rana brought a bagful of currency notes and gave it to the companies. Even if the Rana had paid the price in cash to the companies, the companies would have deposited those amounts in some bank. On the other hand, those companies are said to have given the entire price realised by the sale of the shares immediately as a loan to one Durga Prasad on the basis of the two promissory notes. In discussing this aspect we had pointed out the incongruity in the first and the second statement of Durga Prasad to show that the loan of Rs. 10,80,000/- was said to have been given to him by the vendor companies in one lump sum that he carried this huge amount from Calcutta to Nagpur and gave it to his Munim and that he never deposited that amount in any bank. There is also a total absence of any material to show how Durga Prasad had spent these amounts. All these circumstances would clearly indicate that the story is a fictitious one and that the alleged loan to Durga Prasad is a pure fabrication. It is therefore clear that Durga Prasad is no other than a mere puppet of the assessee4. The shares alleged to have been purchased by the Rana were found to be in possession of Ashoka Marketing Co. a concern practically owned by the assessee. Unless the assessee was the purchaser of those shares, the shares could not have been in the possession of the Ashoka Marketing Co. It is reasonable to assume that after the alleged sale, the assessee was in possession of the shares through Ashoka Marketing Company5. After the shares were sold the money was collected and brought from the bank as pointed out above by the peon A. C. Das of the Ashoka Marketing Co. on nine bearer cheques and according to A. C. Das he paid those amounts to the Rana in the premises of the assessee Sahu Jain at 11 Clive Row36. From the circumstances above enumerated, the Income-tax Officer and the Appellate Assistant Commissioner were fully justified in drawing an inference that the Rana was a name lender for the assessee. Neither the Tribunal nor the High Court has given good reasons for displacing the conclusions reached by the Income-tax Officer and the Appellate Assistant Commissioner. They had a duty to examine the reasons given by those authorities before rejecting them.