Tax reference evidence rule: Tribunal findings stand when supported by material, and adverse inference may follow unexplained income movement.

For a resident assessee, interest accruing outside the taxable territories was prima facie taxable unless it fell within the exemption for income not brought into the taxable territories. In a tax reference, the High Court does not reappreciate the sufficiency of evidence and interferes only where there is no evidence to support the Tribunal's finding. Where direct or circumstantial material exists, and the assessee alone can explain the movement or utilisation of the income, failure to do so may justify an adverse inference. The Tribunal's finding that the interest had been brought into the taxable territories was supported by evidence and material, so the reference was answered against the assessee.

---

---

Issues: Whether there was evidence or material before the Tribunal to support the finding that interest received by a resident assessee in a Part B State had been brought into the taxable territories and was therefore taxable.

Analysis: For a resident assessee, interest accruing outside the taxable territories was prima facie taxable under the charging provisions, unless it was shown to fall within the exemption relating to income not brought into the taxable territories. The burden of proof was not immutable: although the revenue had to establish taxability in the first instance, once sufficient direct or circumstantial material was shown, an adverse inference could be drawn against the assessee if he failed to explain facts within his exclusive knowledge. In reference jurisdiction, the High Court does not reappreciate sufficiency of evidence and interferes only if there is no evidence to support the Tribunal's finding.

Conclusion: There was evidence and material before the Tribunal to support its conclusion that the interest had been brought into the taxable territories. The question was answered in the affirmative and against the assessee.

Ratio Decidendi: In a tax reference, if the Tribunal's conclusion is supported by some evidence or material, the High Court will not disturb it; and where the assessee alone can explain the movement or utilisation of income, failure to do so may justify an adverse inference.

---