TMI Blog1984 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated under s. 147(a) of the I.T. Act, 1961. The officer held that the total sum of Rs. 3,50,000 stated to have been received from these bankers was the undisclosed income of the assessee and an addition was accordingly made of that sum. The officer also added Rs. 23,900 as interest alleged to have been paid to the hundi bankers. The assessee filed an appeal to the AAC. The AAC accepted the contention of the assessee that the amounts in question had been received by it from the bankers. He further held that the assessee was not the beneficiary of the money as it had been, at the instance of Krishnan, the managing director of the assessee-company, passed on to Vijayakumar Cotton Press, a concern solely managed by Krishnan. For this reason, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee before the ITO was simple and, on the face of it, straightforward. It received a sum of Rs. 2,00,000 from one of the bankers and another sum of Rs. 1,50,000 from the other banker; this total sum of Rs. 3,50,000 was transferred by it to Vijayakumar Cotton Press; this was not an income in its hands as it was money borrowed by it and lent to a third person. The Tribunal rejecting the findings of the ITO and a part of the findings of the AAC, disbelieved the first limb of the assessee's case, namely, receipt of the amounts from the bankers, but believed the second limb, namely, transfer of the amounts in question to a third person. In other words, the question of law which emerges from the finding of facts is whether or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that that income is from any particular source. It is for the assessee to prove that even if the cash credit represents income it is income from a source which has already been taxed. In Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807, the Supreme Court observed (p. 810) : " Whether a receipt is to be treated as income or not, must depend very largely on the facts and circumstances of each case. In the present case, the receipts are shown in the account books of a firm of which the appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations, one being a gift of Rs. 80,000 and the other being receipt of Rs. 42,000 from business of which he claimed to be the real owner. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se have not yet been returned to them. So we can take it that there were clear instructions from Shri Krishnan that he had paid the parties and so he should be given credit in the books. We wonder how the Tribunal understood the contents of these documents by seeing the acknowledgment of receipt by the police. Apparently, the Tribunal without any documentary or other evidence accepted the contentions placed before it by the assessee's representative. The Tribunal concluded that the real beneficiary of these credits was Krishnan and the assessee derived no benefit from it. We wonder how these conclusions were drawn by the Tribunal without any evidence whatever especially when the Tribunal disbelieved the assessee's contention that it recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue had raised the point as to whether or not the Tribunal could have rightly in law concluded that the amounts were not liable to be added as income of the assessee when the assessee's contention that it had received them from the bankers was rejected by the Tribunal, and particularly when it found that the amounts were transferred by the assessee to a third person. In other words, the question of law on which the Revenue sought a reference was whether, on the In our view, the Tribunal misdirected itself in relying upon certain facts and circumstances which were not supported by any evidence produced before it. We are also of the view that the Tribunal misdirected itself in holding that the money which had been admittedly transferred by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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