1968 (9) TMI 32 - HC - Income Tax

Court rules in favor of assessee, rejecting Tribunal's suspicion-based evidence. Concrete proof required.

The court ruled in favor of the assessee, finding that the Tribunal's rejection of evidence based on suspicion was unjustified. The court held that ... All the oral and documentary evidence produced by the assessee-HUF to support its claim of a partial partition in the family was rejected by the Tribunal mainly on suspicion and conjecture - action of tribunal is not justified Issues:1. Whether there was a partial partition in the assessee's Hindu undivided familyRs.2. Whether the income earned from the business continued to be the income of the Hindu undivided family after a specific dateRs.Analysis:The case involved a dispute regarding the partial partition in the Hindu undivided family of the assessee and the treatment of income earned from the family business. The assessee claimed a partial partition occurred on 17th August, 1955, supported by a partnership deed and an agreement. However, the Income-tax Officer rejected this claim, leading to successive appeals. The Tribunal held that the partial partition was not proven based on various reasons, including the absence of family books, delay in public intimation, and suspicions regarding the authenticity of documents and witnesses.The Tribunal's rejection of the assessee's evidence was primarily based on suspicion and conjectures rather than concrete proof. The Tribunal's observations on the absence of family books and delay in public intimation were countered by the fact that the family did not maintain accounts and the partners were family members. The Tribunal's doubts regarding the authenticity of documents and witnesses were deemed unsubstantiated, as there was no concrete evidence to support the suspicions raised.Drawing parallels to a similar case, the court emphasized that suspicions and conjectures cannot replace concrete proof in determining the genuineness of a claim. The court found that the rejection of the assessee's evidence solely on suspicion was unjustified. The court concluded that the findings of the Tribunal regarding the absence of a partial partition and the continuity of income as that of the Hindu undivided family were legally unsustainable.In the final judgment, the court ruled in favor of the assessee, stating that the findings of the Tribunal were not legally sustainable. The court awarded costs to the assessee and directed the Commissioner of Income-tax to pay Rs. 200 as costs for the reference.