TMI Blog2017 (8) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... d themselves to give evidence, there was nothing to prevent them from doing so, and indeed, no complaint was made in the court below that their evidence had not been taken. There is no substance in this contention. We have considered all the contentions urged on behalf of the appellant at some length. We would like to make it clear that we are not sitting here as a court of appeal on facts. We have examined the record only with a view to see whether there is any misdirection or non-direction, such as is likely to have affected the result, and we have come to the conclusion that there is none, and that the finding of the Tribunal is not therefore open to attack. It was finally urged that even assuming that the contracts with the brokers were sham, the result would only be to substitute J. R. Pillani, Gwalior, in their place, and even then, the contracts would have been concluded at Gwalior. But that is not the case put forward by the appellant. Far from pleading that the brokers were nominal parties and that the contracts were with J. R. Pillani, Gwalior, the appellant contended that it had no privity of contract with J. R. Pillani, Gwalior, and the evidence adduced by it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt to this circumstance. This argument lacks substance. Let us presume that the entries in those accounts would show that the dealings took place as contended for by the appellant. But if the arrangement of the appellant with Jwaladutt Kishanprasad was as deposed to by J. R. Pillani, the accounts of the Gwalior firm would have been maintained conformably to that arrangement. By itself, therefore, it would mean little. In this connection, it should be stated according to Pillani the branch at Gwalior was really run by the employees of the Birlas, a statement which was accepted by the Appellate Assistant Commissioner. 11. We have so far dealt with the criticisms leveled bythe appellant against the evidence, direct and positive, in support of the finding of the Tribunal that the contracts were concluded at Bombay. But to view the matter in its proper perspective, we must look at the picture at the other end, and consider the evidence adduced to prove that the agreements were made in Gwalior. Now, the facts found by the Income-tax authorities are these : The three brokers in whose names the contracts stood were, having regard to their means, not likely to have been thought of for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions of the three brokers were entered in Kherij Khata, which is said to have been maintained for parties for whom there are small dealings and whose accounts are cleared up in short time. But then, these transactions are not small transactions, nor were they close in a short time. Though the dealings went on for several months and there were several settlements, it was not until the 15th March, 1943, that payments are alleged to have been made to them. In the absence of regular ledgers in the names of these parties and having regards to the fact that the entries in the Kherij Khatas were journal entries, the Income-tax authorities were not prepared to attach any value to them. 13. Mr. Kolah argued that the contracts between theappellant and the three brokers expressly recite that they are as between principals and principals, that there were clauses therein providing for delivery and payment at Gwalior and that there was no reason for not accepting them as correct. But it is pointed out by the Income-tax authorities that the contracts provide for the business being done in accordance with the rules and bye-laws of the East India Cotton Association, Bombay, that according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to prove that the facts assumed by the Assessing Officer in the notice were erroneous. 11. Much earlier, in Phool Chand Bajrang Lal and Anr. v. Income-tax Officer and Anr. , the Supreme Court reviewed the entire case law and concluded that: (a)There must be some specific, reliable and relevant information available with the Assessing Officer. (b) The Assessing Officer must have reasons, whichhe must record, that income has escaped assessment. (c) The case should not be one of a mere change ofopinion by the Assessing Officer or the drawing of a different inference from the same facts but that those reasons must be based on facts which have subsequently come into possession of the Assessing Officer. (d) The sufficiency of reasons for forming the belief isnot for the Court to judge although the assessed can contend that the belief was not bona fide or was based on vague, irrelevant and non-specific information or that the material did not have any rational connection or a live link for the formation of the requisite belief. This is what the Supreme Court said: From a combined review of the judgments of this Court, it follows that an Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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