Proviso to section 13 cannot sustain an income addition without proof that the assessee itself received or accrued the amount.

The proviso to section 13 of the Indian Income-tax Act, 1922 could not support an addition unless the Revenue proved that the assessee-company itself accrued or received the alleged income. The Tribunal found no evidence that the company received amounts beyond the contractual prices, and no nexus was shown between any alleged manipulation by managing agents and the company's actual receipts. The question whether excess income had been received was treated as one of fact, and the factual finding was that no such income accrued or was received by the assessee-company. The disputed addition was therefore not justified and the Tribunal's deletion was upheld.

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Issues: Whether the proviso to section 13 of the Indian Income-tax Act, 1922 could be invoked to sustain the addition of Rs. 76,92,566 as income of the assessee-company.

Analysis: The material before the Tribunal did not establish that the assessee-company had received any amount in excess of the contractual prices or that any additional income had accrued to it. The Tribunal's finding was that, even if the managing agents or their nominees had manipulated the transactions for their own benefit, no link was shown to attribute the alleged excess receipts to the assessee-company. The question whether any amount was received beyond what was recorded was treated as one of fact, and the factual finding was that the assessee-company neither accrued nor received the alleged income.

Conclusion: The proviso to section 13 could not be invoked, and the addition of Rs. 76,92,566 was not justified. The issue was answered in favour of the assessee-company and against the Revenue.

Final Conclusion: The reference was answered by upholding the Tribunal's deletion of the disputed addition, and no further adjudication survived on the second question.

Ratio Decidendi: An addition under the proviso to section 13 cannot stand unless the Revenue establishes that the assessee-company itself accrued or received the alleged income; alleged manipulation by managing agents, without a proved nexus to the assessee's actual receipts, is insufficient.

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