TaxTMI 
TaxTMI 
TaxTMI 
1968 (2) TMI 13
X X X X Extracts X X X X
X X X X Extracts X X X X
....inding that the purchase of the shares by the Rana was not a benami transaction was legally valid?" The third question of law was as follows : Tax Case No. 16 : " Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the dividend income of Rs. 1,81,300 and the profit on sale of shares amounting to Rs. 28,47,652 were not assessee's own income is a perverse finding having regard to the evidence on record ?" Tax Case No, 17 : " Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that a sum of Rs. 1,87,500 dividend income was not assessee's own income is a perverse finding having regard to the evidence on the record ?" Tax Case No. 18 : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the sum of Rs. 10,80,000 from the total income of the assessee by holding that the Rana was not the benamidar of the assessee ?" Case No. 16 is in respect of the assessment year 1956-57, Case No. 17 in respect of the assessment year 1955-56 and Case No. 18 in respect of the assessment year 1954-55. The principal question in all the cases is whether the purchase of some shares....
X X X X Extracts X X X X
X X X X Extracts X X X X
....state certain well-established principles which have been called out from the decisions of the Supreme Court cited at the bar. Most of the principles find place in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax. The relevant portions of the placitum which correctly summarise the views of the court are reproduced below : " Findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come ; and this is so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribunal. In other words, such a finding can be reviewed only on the ground that there is no evidence to support it or that it is perverse. When a conclusion has been reached on an appreciation of a number of facts established by the evidence, whether that is sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises." In the second case, their Lordships said : " ...we are in entire agreement with the learned Solicitor-General when he say that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends ; because it is equally clear that in making the assessment under sub-section (3) of section 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. Commissioner of Income-tax. " In the Punjab case, the High Court said : " (a) An Income-tax Officer is not bound to rely on such evidence ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd con has been considered in reaching the final conclusion ; and whether the conclusion reached by the Tribunal has been coloured by irrelevant considerations or matters of prejudice. The decisions of the Supreme Court in Dhirajlal Girdharilal v. Commissioner of Income-tax and Omar Salay Mohamed Sait v. Commissioner of Income-tax do not, however, require that the order of the Tribunal must be examined sentence by sentence, through a microscope as it were, sop as to discover a minor lapse here or an incautious opinion there to be used as a peg on which to hang an issue of law. In considering probabilites properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions." In Bhaichand Amoluk & Co. v. Commissioner of Income-tax the aforesaid observations were repeated, and their Lordships further said : " Though the Tribunal would be well-advised to leave out altogether speculation and surmises, the mere fact that the Tribunal has also referred to some additional reasons which may be characterised as surmises, would not give rise to a question of law, if the finding is based on such solid facts that the surmises would not make ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nami transactions never acted upon and not intended to pass the title which was ostensibly conveyed. The Privy Council observed : " With regard to all the other points, it must be remembered that this is not the ordinary case of a benami dispute. In the ordinary case you have the benamidar or those claiming under him on the one side maintaining that the transaction is a real one ; and you have the former owner and those claiming under him on the other side, maintaining that it is a sham; and each party has in his own power such receipts, such evidence of payments, such connection with the agents concerned, as should suffice to prove his own case if it is a true one. But the peculiarity of this case is that the title of benamidar, and the title of the original true owner, coalesced in the person of Fatteh Kunwar within four years of the first transaction and within three of the second and it was she and it is the defendant who is her representative who have had in their hands the whole of the evidence necessary to prove whether the transaction was a sham or a real one. Therefore, the absence of evidence certainly does not tell against the plaintiff, but it rather tells against the ....