No-evidence finding on undisclosed income cannot stand where accounts and affidavits plausibly explain cash entries.

A finding that income represented undisclosed sources can be set aside where it rests on no evidence or on an inference no reasonable judicial authority could draw. Here, the accounts were accepted as genuine, and the entries with supporting affidavits provided a plausible explanation for possession and encashment of high denomination notes. The revenue's case proceeded on conjecture, with no challenge to the cash book entries and no discernible material supporting the figure attributed as concealed income. The result was that the addition could not stand, and the referred question was answered in favour of the assessee.

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Issues: Whether the Tribunal's finding that Rs. 30,000 represented income from undisclosed sources was supportable on the evidence and, if not, whether that finding gave rise to a question of law.

Analysis: The accounts were accepted as genuine, and the entries together with the affidavits furnished a plausible explanation for the possession and encashment of the high denomination notes. The addition made by the revenue authorities rested on conjecture that every relevant receipt must have been in high denomination notes, but no further scrutiny or challenge to the cash book entries was undertaken. A finding of fact may be interfered with in law where it is based on no evidence or on an inference that no reasonable judicial authority could draw. The Tribunal's selection of Rs. 30,000 as concealed income was not shown to rest on any discernible material and amounted to pure surmise.

Conclusion: The finding was unsupported by evidence and was erroneous in law; the assessment of Rs. 30,000 as undisclosed income could not stand and the answer to the referred question was in the negative, in favour of the assessee.

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