Income-tax reference evidence can be relied on if disclosed and tested, and supported findings will not be reappraised.

In income-tax reference jurisdiction, material gathered by the assessing authority through private enquiry could be relied upon if it was disclosed to the assessee and an adequate opportunity was given to explain it. Statements recorded before the Income-tax Officer were treated as material, and later permission to cross-examine satisfied fairness requirements. The High Court's role under section 66 was advisory and did not permit reappreciation of evidence as an appellate court. Where the Tribunal's finding was supported by material on record and could reasonably be reached on that basis, it was not liable to be disturbed as unsupported by evidence or perverse.

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Issues: Whether the Tribunal's finding that the disputed amounts represented the assessee's income was supported by material on record, and whether statements recorded by the assessing officer in the absence of the assessee could be relied upon when the assessee was later given an opportunity to test them.

Analysis: The assessment authorities were entitled to act on material collected by the Income-tax Officer through private enquiry, provided the material was disclosed to the assessee and an adequate opportunity was given to explain it. The statements of the witnesses recorded before the Income-tax Officer were therefore material, and the Appellate Assistant Commissioner's later permission to cross-examine satisfied fairness requirements. The High Court's role under section 66 was advisory only and did not extend to reappreciating evidence as an appellate forum. Since there was material on which the Tribunal could reasonably reach its conclusion, the finding could not be disturbed as unsupported by evidence or as perverse.

Conclusion: The Tribunal's finding was supported by material on record, and the assessees' challenge failed.

Ratio Decidendi: In income-tax reference jurisdiction, material collected by the assessing authority may be relied upon if it is disclosed to the assessee and an adequate opportunity to explain it is afforded, and a finding based on such material will not be interfered with where there is evidence reasonably supporting it.

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