1. This is a reference at the instance of the CIT under s. 66(2) of the Indian I.T. Act, 1922. In this reference we are concerned with the assessment years 1960-61 and 1961-62 for which the previous years ended on 31st March, 1960, and 31st March, 1961, respectively. In the view that we are taking we shall refer only to the sum Rs. 40,000 which pertains to the assessment year 1960-61.
2. During the previous year ending on 31st March, 1960, the assessee had purchased the following shares :
1. 77 shares of Tata Iron and Steel Co. Ltd. for Rs. 16,118.
2. 50 shares of Baroda Rayons for Rs. 1,793.75.
3. The assessee had started maintaining books of account from 1st April, 1960. On the opening date, viz., 1st April, 1960, the cash on hand was shown as Rs. 25,000. In the course of the assessment the ITO went into the question of the source of Rs. 42,912 consisting of the opening cash balance of Rs. 25,000 and the aggregate amount of Rs. 17,911.75 for which the two scrips had been purchased. The explanation of the assessee was that he had earlier sold 200 shares of Tata Iron & Steel Co. Ltd. in March/April, 1956, for a sum of Rs. 49,381. According to the assessee, subsequently there were cash withdrawals from his bank account which were given to his (assessee's) wife for safe custody. These withdrawals were of Rs. 35,000 on 27th April, 1956, and Rs. 30,000 on 23rd August, 1956. According to the assessee, his wife was thus in possession of a sum of nearly Rs. 40,000 in cash.
4. The ITO rejected the explanation given by the assessee for a number of reasons which are set out in para. 3 of the statement of the case. The aggrieved assessee then appealed to the AAC. All the contentions which had been urged before the ITO were repeated before the AAC. The AAC noticed that the assessee had made a wealth statement on 10th February, 1958, in which the assessee had declared ornaments worth Rs. 1,500 only belonging to his wife as her stridhan. The cash amount of Rs. 40,000, which was claimed to be lying with his wife, was not shown in this statement. In view of this, the AAC declined to interfere with the ITO's decision in the matter. The assessee then appealed to the Tribunal. Before the Tribunal, a number of contentions were urged on behalf of the assessee and an explanation was given as to why in the wealth statement there was no mention of the cash amount of Rs. 40,000 with his wife. The Tribunal has dealt with all the contentions on behalf of the assessee in paras. 4 and 5 of its appellate order. If para. 5 of the said order is carefully perused, it is found that the Tribunal has taken into account all the points both for and against the assessee in arriving at the conclusion that it ultimately did that the assessee was entitled to the benefit of doubt, and accordingly the amounts added to his income for the two years were directed to b deleted. It is from this order of the Tribunal that the reference arises.
5. It appears to us unnecessary to summarise the approach of the Tribunal. It will be sufficient for our purpose to indicate that the Tribunal has applied its mind to all relevant factors. It has weighed all the arguments for and against the assessee's explanation. It has not shut out any relevant item of material. Its conclusion is not based on conjectures or surmises. Finally, it will be sufficient for our purposes to observe that the conclusion reached by the Tribunal is a possible one on the facts and circumstances of the case, and if that be so, it would be improper for the High Court in its limited reference jurisdiction to reverse that conclusion. Such a power of reversal would be an appellate power which we do not possess. This is not to be taken to imply that the conclusion reached by the Tribunal is found to be faulty in any manner. On the material placed before the Tribunal came to the conclusion that the assessee's explanation was such as was just possible and accordingly decided to give the benefit of doubt to the assessee. It appears to us that substantially this is the correct conclusion on the facts of the case.
6. The following question has been referred to us :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling the assessment of Rs. 40,000 for 1960-61 ?'
7. In the view that we have taken of the facts and circumstances arising in the reference, the question is answered in the affirmative and in favour of the assessee. Parties will, however, bear their own costs of this reference.