Intermediary remittance not taxable as income when source is disclosed and no part is shown to have accrued to assessee.

A remittance received by an intermediary for onward transmission cannot be taxed as the intermediary's income where the source is disclosed, the stated purpose is payment to a third party, and no material shows that any part remained with the intermediary. The Revenue bears the burden of proving that a receipt falls within the taxing provision, and an adverse inference cannot be drawn merely because the money passed through the assessee's hands. On these facts, the court found the Tribunal's conclusion unsustainable because it ignored the admitted source of the funds and the absence of evidence that the amount accrued to the assessee as his own income.

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Issues: Whether the Tribunal's finding that Rs. 4,00,000 constituted the assessee's assessable income was unreasonable, perverse, and unsustainable in law.

Analysis: The remittance of Rs. 4,00,000 was traced to the Calcutta company, which had itself explained that the amount was sent through the assessee only for payment to the intended Bombay party. The evidence showed that the assessee acted merely as an intermediary or agent for transmission of the money and that no material established that any part of the sum remained with him. In cases where a receipt is sought to be taxed as income, the burden lies on the Department to prove that it falls within the taxing provision; where the source is disclosed and not shown to be false, an adverse inference cannot be drawn merely because the receipt passed through the assessee's hands. On the facts, the Tribunal's conclusion ignored the admitted source and the absence of any evidence that the amount accrued to the assessee as his own income.

Conclusion: The finding was held to be perverse and unreasonable, and the question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: A remittance received by an intermediary for onward payment, where the source is disclosed and no part of the amount is shown to have remained with the intermediary, cannot be assessed as the intermediary's income merely because it passed through his hands; the Revenue must prove that the receipt is taxable in the assessee's hands.

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