1. The assessee at whose instance this reference was called for under section 66(2) of the Indian Income-tax Act, 1922, is a firm known as Messrs. Kishinchand Chellaram carrying on business at Gazdar House, Dhobi Talao, Bombay. We are concerned with the assessment year 1947-48, the relevant previous year being the year ending 6th April, 1947. The question which has been posed for our decision is as follows :
'Whether there was any material evidence to justify the findings of the Tribunal that the amount remitted by an employee of the Madras branch to an employee of the Bombay branch was the income of the firm, Kishinchand Chellaram, from undisclosed sources ?'
2. The question relates to an amount of Rs. 1,07,350 which was remitted by telegraphic transfer from Madras to Bombay on 15th October, 1946, and was received at Bombay on 16th October, 1946.
3. Messrs. Kishinchand Chellaram were assessed under section 23 of the Indian Income-tax Act and their assessment completed for the year in question on 30th June, 1951. They were assessed on an income of Rs. 26,43,573. Some time in 1955, however, the Income-tax Officer received certain information and commenced to make enquiries regarding the amount of Rs. 1,07,350. He wrote to the manager of the Punjab National Bank, Kalbadevi Branch, Bombay, asking for particulars of the remittance which had been received through that branch at Bombay. That letter is not on the record, but the bank manager's reply dated 18th February, 1955, has been reproduced verbatim in paragraph 2 of the statement of the case from a quotation thereof in paragraph 3 of the order of the Appellate Assistant Commissioner. The letter was as follows :
'With reference to your above letter, we have to inform you that one telegraphic transfer of Rs. 1,07,350 sent by Messrs. Kishinchand Chellaram from Madras was received by us on October 16, 1946. T. T. receipt was issued by us on the same day in favour of one Nathirmal and paid in cash on the same day.'
4. On receipt of this letter the Income-tax Officer wrote two letters to the assessee dated 24th February, 1955, and 4th March, 1955. These letters again are not before us, but the assessee's reply thereto dated 24th March, 1955, was :
'With reference to your enquiry about the remittance of Rs. 1,07,350 to one Mr. Nathirmal we are not able to trace any such entries in the books of Messrs. Kishinchand Chellaram, Madras (i.e., Pehdi).
We have however referred the matter to our Madras office and shall write to you further on hearing from them.'
5. On 2nd February, 1956, the Income-tax Officer again wrote to the assessee :
'I understand that one T. T. of Rs. 1,07,350 was sent by Messrs. Kishinchand Chellaram, Madras, on October 16, 1946, in favour of the Punjab National Bank Ltd., Kalbadevi Road, Bombay. This amount was paid to one Shri. Nathirmal in cash on the same day. I am to request you to explain the nature of the above transaction and to produce the relevant proofs of having accounted for (sic) in your books of accounts.'
6. To this letter also the assessee replied on 9th February, 1956, that they had again looked in their books of accounts and did not find any such entry of Rs. 1,07,350. They added :
'In the absence of such entry we are not in a position to say anything further.'
7. Thereupon, a notice under section 34 was issued against the assessee in respect of this amount which according to the department had escaped assessment. This notice was issued on 15th March, 1956, and was received by the assessee on the next day. Thereafter, nothing seems to have been done for a considerable time and it was only on 4th March, 1957, that the Income-tax Officer wrote to the assessee stating the facts and requesting them to explain the nature of the transaction and to produce the relevant books of account. On receiving this letter the assessee wrote to the Punjab National Bank, Kalbadevi Branch, communicating the information given in the letter of the Income-tax Officer and asking the bank to let the assessee know the full name and address of the person to whom the payment was made by the bank and also the name of the bank in Madras from whom the T. T. was received by the Punjab National Bank, Bombay. They added that the information was required urgently and may be supplied 'per bearer, Mr. Parsuram, the accountant of the firm.' To this query from the assessee the Punjab National Bank gave an important reply on 9th March, 1957, in which they stated :
'We received one T. T. for Rs. 1,07,350 from our Madras office on October 16, 1946, favouring Nathirmal. The amount was remitted by Messrs. Kishinchand Chellaram through our Madras office. The address of the payee as per our record is Guzdar House, Girgaum Road, Bombay.'
8. After this letter was received from the Punjab National Bank, the assessee wrote a further letter to the Income-tax Officer stating that they (the assessees) were satisfied that 'no such amount had been remitted by our office in Madras.' They, however, added that Nathirmal was a common name in their community and, therefore, requested the Income-tax Officer to give them the father's name of Nathirmal 'to enable us to look into the matter further'. They also stated :
'You will also kindly let us know as to who, on behalf of the firm purports to have sent the T. T. from Madras. Can you kindly give us any other information that you may have in your possession to be able to deal with the matter ?'
9. It appears that thereafter the Income-tax Officer simply proceeded to pass his order under section 34 on 15th March, 1957.
10. The Income-tax Officer held that there was no reason to doubt the bank's statement that the amount was remitted by Messrs. Kishinchand Chellaram, Madras. As regards the person who encashed the T. T. the Income-tax Officer found that Nathirmal's address was Guzdar House, Dhobi Talao, which was the same address as that of the assessee; that Nathirmal had encashed the T. T. and that 'he was identified by an officer of the bank'. He also found that 'on the T. T. form, however, was also given his other name as N. V. Bani' and held :
'It is seen from the assessee's records that this person is an employee of the assessee in the relevant accounting year.'
11. The Income-tax Officer thus found as follows : That the T. T. was encashed by Nathirmal, an employee of the assessee, who had been so identified by an officer of the bank. This Nathirmal was also known as N. V. Bani. The conclusion was, therefore, irresistible that the T. T. was sent by the assessee from its Madras office and encashed by the assessee's employee on their behalf. It thus represented the income of the assessee.
12. The Appellate Assistant Commissioner in appeal upheld the finding of the Income-tax Officer. He relied upon the same circumstances that the Income-tax Officer relied on. Before the Appellate Assistant Commissioner a complaint was made that a full and proper enquiry as to the remittance had not been made and that the relevant application for a telegraphic transfer made at Madras should be called for from the Punjab National Bank Ltd. at Madras. It appears that this was done and the application for telegraphic transfer bore the signature of one Tilokchand, c/o. Messrs. K. Chellaram, 181, Mount Road.
13. As regards this person the facts stated in the statement of the case are as follows : At the relevant time there were two persons called Tilokchand in the employ of the assessee. One of them was working at their Walajapet factory and the other in the Mount Road shop. The person working at Walajapet factory was known as V. Tilokchand Thadani and the person working at the Mount Road shop was known as Tilokchand Chellaram. The latter, namely, Tilokchand Chellaram, was at Hongkong at the time when the Income-tax Officer was making enquiries regarding the remittance of Rs. 1,07,350. Tilokchand Chellaram was at one time working at the Ootacamund branch of the assessee's business run under the trade name of K. Chellaram. In Madras, however, this name has been given to another firm known as Kevalram Chellaram.
14. The Appellate Assistant Commissioner held that it was Tilokchand Chellaram who had joined the Mount Road branch as manager a few days before the remittance on his transfer from Ooty branch, who was concerned with the remittance. It is not in dispute before us and is stated as a fact in the statement of the case also that the remittance from Madras was by payment of cash to the Punjab National Bank at Madras. Upon these facts the Appellate Assistant Commissioner took the view that the mere fact that the remittance was by an employee to another employee did not absolve the appellant from explaining and proving the nature and source of the remittance. He added that 'the employees were no more than stooges in the appellant's hands', a remark to which strong exception was taken in the arguments before us.
15. When the matter was taken in appeal to the Tribunal, the Tribunal confirmed the orders of the tax authorities and relied upon four important circumstances as follows :
1. The fact that there was a remittance of Rs. 1,07,350 from Madras and that that remittance was received by an employee of the assessee in Bombay.
2. That there was an employee at Madras bearing the same name as the person who remitted the amount from Madras.
3. That the assessee was not in a position to show that the respective employees in Madras and in Bombay were carrying on any business of their own and were in a position to remit so large a sum as Rs. 1,07,350 from Madras to Bombay.
4. That it would have been easy for the assessee to have the said persons examined so as to show the same could not represent any amount belonging to the assessee but the assessee had merely informed the Income-tax Officer that it had nothing to do with this amount.
5. It would have been open to the assessee to establish facts to the contrary to show that the bank's statement that the assessee did not remit the amount is not correct and thus displace the evidence on record, but it did not choose to examine the bank officers with reference to that aspect.
16. The Tribunal, therefore, held that it was the assessee who had remitted this amount from Madras it its own employee and, therefore, it represented the assessee's income from undisclosed sources.
17. These findings have been challenged on behalf of the assessee in the arguments before us and Mr. Advani on behalf of the assessee has urged that the Tribunal has found that an employee of Kishinchand Chellaram, the assessee, remitted moneys from Madras to another employee of the assessee, which may be a finding of fact, but in this case even assuming all the facts as they have been found by the Tribunal there is no evidence to prove that Kishinchand Chellaram remitted the amount or that the amount belonged to the assessee-firm. He contended that it is just possible that these servants were concerned in remitting and receiving amounts in respect of their private dealings or it may be that they were dealing in amounts belonging to third parties, but there is absolutely nothing on the record to show that it was an amount belonging to the firm, M/s. Kishinchand Chellaram. He also complained that it was impossible for the assessee to adduce any evidence or other material to counter these inferences drawn against the assessee because the assessee was throughout completely in the dark, firstly, as to the name of the remitter of this amount, and secondly, as to the name of the payee of the amount at Bombay. He has pointed out that the name of Tilokchand as the remitter of the money from Madras came to be known for the first time when an application was made to call for the T. T. application before the Appellate Assistant Commissioner. It was only when the T. T. application was received that the name of Tilokchand was disclosed for the first time. It was impossible therefore, for the assessee to ascertain the true facts without knowing who the remitter was. Secondly, he pointed out that the same difficulty for the first time in the Income-tax Officer's letter dated 4th March, 1955, and Nathirmal being a common name in the community to which the parties belonged, it was impossible to trace this Nathirmal without his father' name being known. The assessee made this clear to the Income-tax Officer in their letter dated 13th March, 1957, and asked for the father's name of Nathirmal. Counsel urged that it was only disclosed for the first time to the assessee that this Nathirmal was the same as one N. V. Bani who was an employee of the assessee at Bombay from the order of the Income-tax Officer passed on the 15th March, 1957, and thereafter, there was no scope for further enquiry by the assessee nor an opportunity to counter that evidence. He, therefore, urged that these circumstances had taken the assessee by surprise and had precluded the assessee being able to place any material or evidence to counter the facts found by the tax authorities and the Tribunal.
18. As regards the two letters dated 18th February, 1955, and 9th March, 1967, written by the bank, the first one to the Income-tax Officer and the second to the assessee, counsel urged that these letters were not only written upon incorrect information by the bank manager but they were in flat contradiction with what was stated in the original telegraphic transfer itself. This conflict appears from the T. T. application which was called for before the Appellate Assistant Commissioner. In the T. T. application the name mentioned was Tilokchand, c/o K. Chellaram, whereas in the bank manager's letters the name of the remitter is mentioned as Messrs. Kishinchand Chellaram. Thus, these letters are deprived of all evidentiary value, because they are contrary to the very statement in the telegraphic transfer itself. Counsel urged, therefore, that all these findings given by the authorities below are based upon conjectures and surmises and not upon relevant material or evidence. He also argued that the assessee has been making returns for a considerable number of years and his accounts books had never been doubted. Even in the assessment for the relevant account year its account books had been accepted at the time of the original assessment and its return of a large income of as much as Rs. 26,42,513 was accepted by the department. When the assessee's account books were found truthful and were accepted, it is in the highest degree improbable that the assessee would stoop to concealing a small income of a little over a lakh of rupees when he had voluntarily made a return of over Rs. 26 lakhs of rupees.
19. On behalf of the department main reliance has been placed upon the two letters dated 18th February, 1955, and 9th March, 1957, and several surrounding facts and circumstances. In reply to the contention of the assessee, that they had not been given an adequate opportunity to meet the evidence and the facts and circumstances relied on on behalf of the department, it was urged that no grievance at all had been made before the Appellate Assistant Commissioner or the Tribunal that an adequate opportunity had not been afforded, nor had the assessee made a grievance of it before this court by raising any question in respect of denial of opportunity to it. Therefore, it is not open to the assessee to canvass that point in this reference. Secondly, it was urged that there has been in fact no denial of any opportunity.
20. As regards the contention on the merits, counsel on behalf of the department urged that the finding is a pure finding of fact reached concurrently by the three authorities below and that they have taken into account all the relevant circumstances. Such a finding does not give rise to any question of law and cannot be interfered with. A number of authorities have been cited on one or the other of the circumstances relied on by either party and on the question of burden of proof, which we shall presently discuss.
21. The principal material or evidence upon which the decisions of the two tax authorities as well as the Tribunal have been based is, firstly the letter dated 18th February, 1955, written by the manager of the Punjab National Bank, Kalbadevi Branch, to the Income-tax Officer in answer to his queries. The other is the letter of 9th March, 1957, also written by the manager of the bank to the assessee in answer to the assessee's letter dated 7th March, 1957. In both these letters the bank manager has clearly and categorically stated that the telegraphic transfer of Rs. 1,07,350 was sent by Messrs. Kishinchand Chellaram from Madras. In the second letter the expression used is 'the amount was remitted by Messrs. Kishinchand Chellaram through our Madras office.' Without more, these two letters written by the manager of the bank which negotiated the telegraphic transfer would undoubtedly be good evidence upon which the tax authorities as well as the Tribunal could base their decisions. Both the letters indicate that the amount remitted belonged to Messrs. Kishinchand Chellaram, the assessee. These letters would be very relevant evidence upon which the authorities below could have based their decisions, but the legal efficacy of these letters is sought to be challenged upon various grounds. In the first place, it is said that both the letters have been rendered useless as evidence, because they are in conflict with the primary evidence in this case, namely, the application for the telegraphic transfer. The telegraphic transfer is not before us and it was urged could not be obtained. We will assume that because of lapse of a great deal of time the message of the telegraphic transfer was not available and that, therefore, the application for the telegraphic can be used to indicate what the telegraphic transfer (exhibit 'I') is dated 15th October, 1946, and it gives the particulars of the telegraphic transfer asked for in the following terms :
'Particular 25 T. T. Urgent Form No. 216------------Est. 82/45THE PUNJAB NATIONAL BANK LIMITED15-10-46NOTES Wanted a Telegraphic Transfer on Kalbadevi,CHEQUES 1,07,369-4-6 Bombay, for Rs. 1,07,350 (One lakhDRAFT SLIP seven thousand three hundred and fifty only)TOTAL 1,07,369-4-6in favour of Amount Exchange Cost of Totaltelegraph----------------------------------------------------------------------Nathirmal, 1,07,350 16-12-6 2-8-0 1,07,350Guzdar House, 19-4-6Girgaum Road, ------------Bombay. 1,07,369-4-6----------------------------------------------------------------------REGD. CASH 'I request you to make the payment by wire entirelyat my risk and on my responsibility and on the distinctunderstanding that no liability whatsoever isattached to the bank for any loss, injury or damagearising or resulting from delay in transmissiondelivery or non-delivery, of the telegraphicmessage or for any mistake, omission or error in thetransmission or delivery thereof or in decipheringthe message or from whatever cause so ever or fromits misinterpretation when received.----------------------------------------------------------------------PUNJAB NATIONAL Tilokchand,BANK, Broadway, c/o. M/s. K. Chellaram,Madras. 181, Mount Road,Applicant.RECEIVED 15th October, 1946.Rupees one lakh seven thousandthree hundred and sixty-nine/4/6 Sd. Accountant.Wired and confirmedSd. S. Rajagopalan,Manager.'
22. The contention is that the remittance is by one Tilokchand whose address is merely given as c/o. Messrs. K. Chellaram and that, therefore, on the face of it the application for the telegraphic transfer indicates that it was not Messrs. K. Chellaram who were remitting but Tilokchand. The same argument is advanced against the letter of 9th March, 1957, where also the bank manager has stated that the amount was remitted by Messrs. Kishinchand Chellaram. Undoubtedly, there is this difference between the statement in the application for telegraphic transfer and the two letters, that the name of the remitter is not mentioned as Tilokchand in the two letters while it is so mentioned in the application but we are at a loss to see how the application for telegraphic transfer nullifies the effect of the two letters as is contended. Some individual has got to act on behalf of the firm and in this case it happens to be their servant, Tilokchand, so the merely because the application for telegraphic transfer is signed by Tilokchand it cannot be inferred that Messrs. Kishinchand Chellaram could never have sent that amount. On the other hand, the two letters written by the bank manager have definitely stated that it was Kishinchand Chellaram who remitted that amount. That statement is not incompatible with what is stated in the application for the telegraphic transfer. We may, for the sake of argument, assume that either conclusion is possible that Tilokchand, c/o. K. Chellaram, 181, Mount Road, Madras, either signed on his own behalf, giving K. Chellaram's address in Madras or that he signed for and on behalf of Messrs. Kishinchand Chellaram, but if between the two probable conclusions, the Appellate Assistant Commissioner and the Tribunal have weighed the facts and circumstances and come to the conclusion that Tilokchand signed on behalf of Kishinchand Chellaram and not on his own behalf, we can hardly say in a reference under section 66 that such a finding is in any way incorrect or illegal. It was really a matter for the authorities to give that finding of fact.
23. But, it seems to us that there are a number of other circumstances on the basis of which the Tribunal's conclusion can be supported as it has been supported in their order. We may only set forth the important circumstances. It is not disputed that both Tilokchand who sent the money from Madras and Nathirmal who received it at Bombay were employees of the assessee, Messrs. Kishinchand Chellaram. In fact today that question is no longer open. It has been stated in paragraph 7 of the Tribunal's order that the fact that the remittance from Madras was received by an employee of the assessee in Bombay is not disputed. Indeed, the very question which has been framed for our decision postulates that the remitter as well as the payee of this remittance were both employees of Kishinchand Chellaram, the assessee. That is, therefore, an important circumstance which will have to be taken into account in weighing the probabilities. The amount remitted, moreover, is a fairly substantial amount of Rs. 1,07,350. It is a very large amount and the least that we can say is that it was probably not within the capacity of the two employees of the assessee to own that amount and remit it. On the other hand, it is only possible for a well-to-do business like that of the assessee to own such an amount and have it remitted by telegraphic transfer. This fact, taken in conjunction with the other fact that both the remitter and the payee were employees of the assessee, makes the probability, that it was the money of the assessee, very strong. Thirdly, the address, given of the remitter as well as of the payee is the address of the assessee's business both at Madras and at Bombay. It is not in dispute that '181, Mount Road' is the address of the assessee's business premises and 'Guzdar House, Dhobi Talao, Bombay' is the address of the assessee's place of business at Bombay. Therefore, here we have this position, that two persons who are employees of the assessee have remitted a very large amount which they are unlikely to own but which it is very likely belonged to the assessee and in remitting it they have at both ends given the address of the assessee. Surely it was not a strained inference to draw under these circumstances that it was a remittance of the assessee's amount and nothing else. When these circumstances are taken into account and the two letters written by the bank manager are read in the light of these circumstances, the inference becomes almost conclusive.
24. A suggestion was thrown out in the arguments that the transaction could as well have been the private business of the two individuals, the remitter and the payee. That, as we have said, is in the highest degree improbable because both the remitter and the payee were mere servants and there is absolutely no evidence on record to show that they were doing any business of their own or could possibly have been in possession of so large an amount nor has it been suggested why so large an amount could be remitted between them if it was their private amount.
25. From the inception the stand taken by the assessee was purely negative stand. All that they said in answer to the letters written to them and the question asked by the Income-tax Officer is that they were not able to trace any entries in their books of account or that they were satisfied that no such amount had been remitted by their Madras office. This is clear from their letters dated 24th March, 1955,9th February, 1956, and 13th March, 1957, written to the Income-tax Officer. After they became aware of the letter dated 18th February, 1955, in which the bank manager had categorically stated that it was they (the assessees) who had sent the money from Madras to Bombay one should have expected some enquiry from the assessee and some attempt at controverting the facts alleged. They knew that they had two employees by name Tilokchand. Though according to the assessees both these employees had left their service, they certainly knew that it may be suggested that it was either one of these two Tilokchand who was the remitter. There is not an iota of evidence to suggest that the assessee made any enquiries as to the whereabouts of these persons who were their employees. There is also nothing to show that the assessee made any enquiry from the bank manager other than what has been stated in their letter of 7th March, 1957, wherein all that they had asked was the full name and address of the person to whom the payment was made by the bank and the name of the bank in Madras through whom the telegraphic transfer was received. There is no doubt that the person who took away the cash from the bank at Bombay must either have been known to an officer or other employee of the bank or the bank must have sought identification of the person before they paid that person so large an amount, but no attempt seems to have been made to ascertain who identified him in the bank at that time. In the appeal before the Appellate Assistant Commissioner it was known to the assessee that the department sought to connect Nathirmal who had encashed the telegraphic transfer with one N. V. Bani, who was their employee, but there is nothing to show that any attempt was made to find out N. V. Bani and examine him. He was the person who had taken away the cash from the bank and would be the best person to throw light on whether the amount was his or that of the assessee. These circumstances were not irrelevant circumstances as was suggested in the arguments because they impinge upon the conclusion, 'whose money was it that was remitted from Madras to Bombay ?' The cumulative effect of all the above circumstances coupled with the complete passivity of the assessee is telling and leads to only one conclusion, namely, that the amount remitted belonged to the assessee.
26. It was then urged that the books of account of the firm have not been found to be wanting in any way and were not questioned at any stage. The Income-tax Officer accepted them when he first assessed the assessee. It was urged that the account books which were accepted disclosed that the profits from the Madras pedhi for the year of account was a comparatively small sum of about Rs. 47,000 in that year. It was, therefore, improbable that the assessee would have so much money as over Rs. 1 lakh to spare to be remitted to Bombay. That is an argument which merely begs the question. The question is whether this amount of Rs. 1,07,350 represented income from undisclosed sources of the assessee. It is no argument, therefore, to say that the accounts which had been accepted at the original assessment should be the basis on which the question should be judged. If such an argument were to be accepted, reopening would be impossible in almost all cases. The whole basis of the reopening is that the true income was not disclosed. We do not think, therefore, that the argument based upon the acceptance of accounts at the stage of the original assessment can have any relevance to the question before us.
27. The decisions in Mehta Parikh & Co. v. Commissioner of Income-tax, and Omar Salay Mohamed Sait v. Commissioner of Income-tax were relied on in this respect. In the former case only the remark of the Supreme Court at page 187 that 'the cash book of the appellants was accepted and the entries therein were not challenged' was relied on. That was said in a completely different context and upon the particular facts of that case. That was the case where the assessee was found to be in possession of high denomination notes which the assessee was unable to account for. The number of notes involved were 61 of Rs. 1,000 each and the tax authorities declined to accept the explanation of the assessee and held that the entire amount represented by these notes was the assessee's income from undisclosed sources. The Tribunal accepted the assessee's explanation in regard to 31 notes and directed that the assessment against the assessee should be reduced by that amount. The High Court held that there was material before the Tribunal to hold that the sum of Rs. 30,000 represented the income of the appellants from undisclosed sources and, therefore, affirmed the order of the Tribunal. The Supreme Court pointed out that, as the cash book of the appellants had been accepted and the entries therein were not challenged, nor further accounts or vouchers called for, nor the persons who gave the affidavits cross-examined, it was no longer open to the revenue to challenge the correctness of the cash book of the assessee. They also held that an explanation which was accepted as regards the 31 notes and rejected as regards the 30 notes, was based on pure surmise and since the assessee had furnished a reasonable explanation for the possession of the 61 notes there was no jurisdiction for having accepted their explanation in part and having rejected it in part, as regards the sum of Rs. 30,000. It was in that context that the Supreme Court remarked at page 187 that the cash book of the appellants was accepted and the entries therein were not challenged. In the present case, it is the case of both the sides that there are no entries whatsoever, relative to the item in question. It is not logical to hold that the assessee's account books must be held to represent a true position as to its income, profits or gains in respect of items not mentioned in the accounts at all. That seems to us a most unwarranted extension of the principle laid down by the Supreme Court in Mehta Parikh & Co.'s case.
28. The same is the position so far as Omar Salay Mohammed Sait's case is concerned. There also, entries were found to have been made in regard to two accounts in the account books of the assessee, namely, Rs. 1,05,000 and Rs. 52,199-12-6. It was no doubt counsel's argument in that case (see page 164) that at no time prior to the proceedings taken in that case for the assessment years 1948-49 and 1949-50 had any suspicion been entertained by the income-tax authorities in regard to the profits earned by the appellant (assessee) in his business and no formation at all was laid for a conclusion that the assessee had concealed any profits earned by him in his business. After stating the arguments of counsel, the Supreme Court discussed the circumstances and came to the conclusion that there were several irrelevant considerations which were matters of prejudice which had been taken into account and, therefore, the matter should be reconsidered by the Appellate Tribunal. In that context the Supreme Court also remarked that on no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises. In the present case as we have shown there is no entry found in the assessee's account books which is used against him but what has been found is that upon positive evidence the amount represents an item of undisclosed income and that there are no entries relative to that item in the account books of the assessee. These circumstances are quite different from the circumstances in Omar Salay Mohammed Sait's case. As regards the principle that the Tribunal should not base its findings on suspicions, conjectures or surmises, we have already discussed the circumstances and we do not think that the finding in the present case is based on any suspicions, conjectures or surmises, nor do we think that any irrelevant circumstance has been taken into consideration.
29. Several cases were cited for the proposition that where a finding of the Tribunal is not supported by any evidence at all, it gives rise to a question of law and the finding must be set aside. The principle is well-settled, but in the present case as we have shown not only is there ample evidence or other material relevant for consideration, which has been taken into account, but upon that evidence and that material the only conclusion possible was that the amount remitted in the instant case from Madras to Bombay belonged to the assessee. We need not, therefore, discuss these cases individually.
30. It was also strenuously urged on behalf of the assessee that in the past large sums of money had been transferred by the assessee from Madras to Bombay and that all these amounts have been found mentioned in the accounts and it is, therefore, very unlikely that only one amount should not be mentioned. That shows that the amount has nothing to do with the assessee's business and, therefore, naturally would not find place in the assessee's accounts. In the first place, there is nothing before us from which we can hold that prior to the year of assessment, large amounts had been transferred from Madras to Bombay by the assessee. The very basis of this argument, therefore, has not been established, and even assuming that large amounts had been in the years past transferred from Madras to Bombay and vice-versa and that none of such amounts had been shown not to have been entered in the account books of the assessee, that can only be a circumstance which may support the conclusion that the assessee is not guilty of non-disclosure or concealment provided there is other evidence to support such a conclusion. The mere fact that in the past large sums of money had been transferred from Madras to Bombay and it has not been found that they have not been shown in the accounts of the assessee, cannot by itself dispel the conclusion that the assessee failed to disclose this particular account. The circumstances in such a case must be judged as a whole and when all the facts and circumstances are taken into account we have already shown that the conclusion becomes irresistible that the amount transferred from Madras to Bombay was an amount belonging to the assessee.
31. We are bound by the decision which was relied upon, namely, Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax. It clearly enjoins (vide page 37) that :
'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 in the picture as a whole.'
32. In Homi Jehangir Gheesta v. Commissioner of Income-tax the Supreme Court pointed out that :
'In determining whether an order of the Appellate Tribunal would give rise to a question of law the court must read the order of the Tribunal as a whole to determine whether every material fact, for and against the assessee, has been considered fairly and with due care; whether the evidence pro and 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.'
33. Applying these principles we have shown that the cumulative effect of the facts and circumstances as we have discussed above is clearly to support the conclusion of the Tribunal. We have already said that we do not find that they have taken into account any irrelevant considerations or matters of prejudice or based their findings on any conjectures, surmises or suspicions.
34. Then we turn to the other contention advanced by Mr. Advani. The principle prices of evidence in this case are the two letters dated 18th February, 1955, and 9th March, 1957, written by the bank manager to the Income-tax Officer and the assessee, respectively. We have already dealt with the attack against these two letters. It was further contended that there was no opportunity afforded to the assessee to counter the two letters, and we proceed to examine this contention. So far as the letter of 18th February, 1955, is concerned, that letter is not on the record, nor has a copy been furnished to us. An extract from it, however, was quoted verbatim in the order of the Appellate Assistant Commissioner in paragraph 3 and the same passage from that letter has been quoted in paragraph 2 of the statement of the case. No objection appears to have been taken at any stage that since the whole of the letter was not produced the extract from it could not be used. In framing the statement of the case an opportunity was afforded to the assessee's counsel and though he made some suggestions which were accepted (vide paragraph 10 of the statement of the case), no objection appears to have been raised to the use made of this extract from that letter. On the other hand the last sentence in the statement of the case says :
'He (assessee's counsel) did not say that any material fact has been wrongly stated or that any fact relevant to the question has been omitted. 'The letter dated 9th March, 1957, was a letter written to the assessees themselves and it was the assessee who produced it and brought it on record. It hardly lies in the assessee's mouth to urge now that it ought not to have been used. Moreover, a perusal of the order of the Appellate Assistant Commissioner and of the Tribunal shows that no objection was ever taken or opportunity to controvert asked for. Counsel referred to ground No. 6 in the memorandum of appeal and urged that a complaint had been made in that ground that materials had been collected by the department behind the back of the assessee and that he had not been given an opportunity to meet the case against him. It does not, however, appear that this ground was at any stage pressed. There is nothing in the order of the Appellate Assistant Commissioner to suggest that the ground was even brought to his notice. Assuming that the Appellate Assistant Commissioner did learn of the ground, there is absolutely nothing to show that any further objection was taken in the appeal before the Tribunal. Even in this court if it was intended to urge that ground seriously the assessee could have asked for the framing of a question on that ground, but no such application appears to have been made. We cannot, therefore, at the stage of the reference now entertain any such objection particularly to the two letters, one of which is a letter received by the assessee themselves in answer to their query. In Commissioner of Income-tax v. Smt. Annusuya Devi in meeting just such an argument as this, the Supreme Court remarked at page 757 as follows :
'There is also no ground for believing that Anusuya Devi was not given an opportunity to 'clear up the discrepancies' between the statements made by her or on her behalf from time to time in connection with the encashment of the high denomination notes. That plea was not raised before the Tribunal, and the validity of the conclusion of the Tribunal on appreciation of evidence cannot be assailed before the High Court on the ground that departmental authorities had violated the basic rules of natural justice without raising that question before the Tribunal.'
35. The objection taken before us is also an objection on the ground of failure to observe the rules of natural justice and we think, therefore, that we must rule out the objection on the short ground that it was never taken before the Tribunal.
36. At the hearing before us a copy of the letter dated 17th December, 1959, written by the manager of the Punjab National Bank to the Appellate Assistant Commissioner was produced as also the telegraphic transfer application dated 15th October, 1946. The Appellate Assistant Commissioner forwarded both these to the assessee by his letter dated 29th December, 1959, bearing No. GCAP-94 of 1957-58. The letter states :
'The above appeal was heard on 21st November, 1959, and in view of the arguments placed by your representative a summons with a covering letter was issued to the Manager, Punjab National Bank, Armenian Street, Madras, for furnishing information regarding the T. T. remittance of Rs. 1,07,350 on 15th October, 1946. A copy of his reply along with a copy of the T. T. requisitioned is herewith enclosed for your information.'
The appeal is now fixed for further hearing on 9th January, 1960, at 11.30 a.m.'
37. Obviously, the Appellate Assistant Commissioner wrote this letter sending a copy of the T. T. application in order to give the assessee an opportunity to have its say in answer to the T. T. application and it was, thereafter, that the appeal came to be heard. Now, the whole argument in this case has been that the two letters of the bank managers dated 18th February, 1955, and 9th March, 1957, have lost their evidentiary value in view of the telegraphic transfer proved by the T. T. application which was thus produced before the Appellate Assistant Commissioner came to be heard after this clear opportunity was given to the assessee. Looking at it from any point of view, therefore, we will see how there was any breach of any rule of natural justice. All the material that had been collected till that date was squarely brought to their notice.
38. It is no doubt a settled rule that the Appellate Assistant Commissioner or the Income-tax Officer is not bound by the technical rules of law of evidence and that it is open to him to collect materials to facilitate the assessment even by private enquiry but if he desires to use the material so collected the assessee must be informed of the material and must be given an adequate opportunity of explanining. See C. Vasantlal & Co. v. Commissioner of Income-tax. It is precisely in observance of this rule that the Appellate Assistant Commissioner acted in the present case. After the fresh material which he had called for from the bank was before him, he submitted copies of it to the assessee and then fixed the date of hearing. It can hardly be said, therefore, that in the circumstances an adequate opportunity was not afforded to the assessee to meet the evidence, but as we have said even if no such opportunity had been given the assessee never raised any objection before the Tribunal and, therefore, cannot now be heard to urge it in the reference. On the whole, we are satisfied that the Tribunal came to a correct conclusion upon the material before it and there has been no failure to observe any rule of natural justice by not giving an opportunity to the assessee to controvert any material or evidence used by the tax authorities.
39. In the result, we answer the question in the affirmative. The assessee will pay the costs of the Commissioner.
40. By an order of this court dated 10th March, 1970, a further statement of the case was called for, but while passing that order the court had ordered that the costs of that hearing shall be costs in the reference. In view of the fact that it was no fault of the assessee that the additional facts contained in the supplementary statement of the case had not been incorporated in the original statement of the case, we think that the proper order to pass should be that there shall be no order as to costs so far as the notice of motion dated 15th November, 1963, is concerned.
41. Question answered in the affirmative.