M.R.A. Ansari, J.
(1) In pursuance of an order of this Court under section 66(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act) the Income-tax Appellate Tribunal, Delhi Bench (hereinafter referred to as the Tribunal) has referred the following two questions to this Court :-
'1. Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the sum of Rs, 42.000.00 represents the income of the assessed from undisclosed sources 2. Whether there was any evidence for the Tribunal to hold that the cost of construction of the property estimated by the Income-tax Officer at Rs. 84,000.00 was correct ?'
(2) The assessment year under reference is the year 1954-55, the relevant previous year being the financial year 1954-55. Shri Kanshi Ram Bassi, the assessed herein, was a partner in a firm M/s Roller Supply Company and also derived income from letting out on hire some rollers of his own. During the assessment proceedings, the Income-tax Officer found that a plot of land had been purchased in the name of the assessed's wife, Smt. Ganesh Devi, in the year 1951-52 for Rs. 14,724.00 and that a house had been constructed on the said plot, the construction having commenced in February, 1952 and completed in March, 1954. The Income-tax Officer found that the assessed had not withdrawn any sum for the construction of the said property. He, thereforee, called upon the assessed to explain the source from which the cost of construction was met. The assessed thereupon filed a certificate from an architect according to which the cost of construction was Rs. 59,704. As regards the source of the money for the construction of the house, the assessed in his letter to the Income-tax Officer dated 24-11-1957 explained that the cost of construction of the house was met by his wife by the sale of her ornaments. On further elucidation being sought, it was stated before the Income-tax Officer that just before the assessed came from Lahore in 1947, he converted the liquid cash available with his wife into gold and that the cost of construction was met by the sale proceeds of the gold. In support of this Explanationn, the assessed filed five invoices of M/s. Panna Lal Roshan Lal showing that gold worth Rs. 66,000 was purchased by the assessed's wife. Shri Panna Lal was also examined before the Income-tax Officer and he admitted that the invoice belonged to him. The assessed also produced the books of account of M/s Ram Parkash Vinay Kumar to whom the gold had been sold and also examined Shri Ram Parkash in support of the alleged sale. The Income-tax Officer did not accept the Explanationn of the assessed with regard to the source of the cost of construction. He also did not accept the estimate of the cost of construction by the architeet. The Income-tax Officer estimated the cost of construction at Rs. 84,000. As the construction of the house was spread over a period of two years relevant to the assessment years 1953-54 and 1954-55, he included a sum of Rs. 42,000 as the assessed's income from undisclosed sources for the year 1954-55. The addition was confirmed by the Appellate Assistant Commissioner. When the matter came up before the Tribunal, the latter found that the assessed's wife Smt. Ganesh Devi who, according to the assessed, had met the cost of construction by the sale of her gold, had not been examined by the Income-tax Officer. The Tribunal, thereforee, directed the Income-tax Officer to record her statement. Accordingly, the Income-tax Officer recorded the statement of Smt. Ganesh Devi. She stated that she had saved about Rs. 35,000 from household expenses and also received Rs. 25,000 as income from her two agricultural lands in Raising Nagar, which had been gifted to her by her father in 1925 and that she had purchased gold worth Rs. 66,000 from Panna Lal Roshan Lal in 1947. She further stated that when she left Lahore in 1947, she brought the gold with her and then in 1951, she asked her husband to sell the gold and buy a house for her or construct one on a plot purchased by her at Kamla Nagar for Rs. 14,000. The Tribunal considered the entire evidence placed by the assessed to prove the source of the cost of construction of the house and also the statement of Smt. Ganesh Devi and came to the conclusion that the assessed had failed to explain the source of investment in the construction of the property and that the alleged sale of gold could not be held to be proved. The Tribunal further held that even if it be taken that the gold was sold to Ram Parkash Vinay Kumar, the alleged source of acquisition of the gold was unproved and was not worthy of any credence. The Tribunal further held that the Explanationn of the source from which the assessed gave the money to his wife having been rejected as being false and untenable, the Revenue authorities were under the circumstances justified in including the amount in question in the assessment year of the assessed as income from undisclosed sources. The Tribunal also agreed with the Income-tax authorities regarding the estimate of the cost of construction at Rs. 84,000. The Tribunal, thereforee, sustained the above addition of Rs. 42,000 in the assessed's income for the assessment year 1954-55.
(3) With regard to the first question referred to us, Shri K. R. Bajaj, learned counsel for the assessed, has raised a two-fold contention namely :-
(I) that the Tribunal was not legally justified in rejecting the evidence adduced by the assessed in support of the source of the cost of construction of the house, and (ii) that even if the Tribunal did not accept the Explanationn offered by the assessed, the Tribunal was not legally justified in drawing the conclusion that the amount in question was the assessed's income from undisclosed sources.
(4) With regard to the second question, the learned counsel for the assessed has contended that the Tribunal's estimate of the cost of construction at Rs. 84,000 was not based upon any evidence but was based merely upon conjectures.
(5) The first contention advanced by the learned counsel involves examination of the scope of the jurisdiction of this Court under section 66 of the Act. The scope of the jurisdiction has been explained by the Supreme Court in a number of decisions. In Omar Salay Mohamed Sait v. Commissioner of Income-tax : 37ITR151(SC) , the Supreme Court explained the position thus :-
'WE are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it, this court will not interfere. It is necessary, however, that every fact for and against the assessed must have been considered with due care and the Tribunal mus have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessed, the assessed should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicious, conjectures or surmises nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its findings, even though on questions of fact, will be liable to be set aside by this Court.'
(6) The rule laid down by the Supreme Court in the above case was reiterated in Commissioner of Income-tax v. S. P. Jain : 87ITR370(SC) and after referring to some of the English as well as the Indian cases on the point, the Supreme Court summarised the legal position as under :-
'IN our view, the High Court and this Court have always the jurisdiction to intervene if it appears that either the Tribunal has misunderstood the statutory language because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory of it, or it has acted on material partly relevant and partly irrelevant or where the Tribunal draws upon its own imagination, imports facts and circumstances not apparent from the record, or bases its conclusions on mere conjectures or surmises, or where no person judicially acting and properly instructed as to the relevant law could have come to the determination reached. In all such cases the findings arrived at are vitiated.'
(7) We may also refer to another judgment of the Supreme Court in Commissioner of Income-lax v. Daulat Ram Rawatmull : 87ITR349(SC) in which it was held as follows :-
'FINDING Son questions of pure fact arrived at by the Tribunal arc 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. Further, when a conclusion has been reached on an appreciation of a number of facts, 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. When court of fact acts on material partly relevant and partly irrelevant, it is impossible to say 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. Likewise, if the court of fact bases its decision partly on conjectures, surmises and suspicions and partly on evidence, in such a situation an issue of law arises.'
(8) The general rule, thereforee, appears to be that the Tribunal is the final fact finding authority and its findings of fact are binding on this Court. The cases cited above are in the nature of an exception to this general rule and the limitations of such an exception have been specifically mentioned by the Supreme Court in the above cases and these limitations cannot be further extended beyond those which have been set down by the Supreme Court. The jurisdiction of this court to interfere with findings of fact by the Tribunal is, thus, restricted to the limitations prescribed by the Supreme Court in the above cases.
(9) The evidence placed before the Tribunal with regard to the source of the cost of construction of the house consisted of :-
(I) the letter of the assessed dated 24-11-1957; (ii) the statement of the assessed's wife Smt. Ganesh Devi; (iii) the statement of Panna Lal Roshan Lal; (iv) the vouchers issued by him for the sale of gold; (v) the statement of Ram Parkash Vinay Kumar ; (vi) the account books of M/s Ram Parkash Vinay Kumar; and (vii) the statement of the assessed.
(10) The Tribunal took into consideration all the above evidence and has given cogent reasons for rejecting the same. The Tribunal has observed that the first Explanationn offered by the assessed in his letter dated 24-11-1957 was to the effect that the cost of consruction was met by the sale of his wife's ornaments. The Tribunal noted that this Explanationn was at variance with the evidence actually adduced by the assessed which was to the effect that his wife, Smt. Ganesh Devi, before leaving Lahore in 1947 had converted her savings which were in the form of Cash into gold bars and that the gold bars had been sold in 1951 and the cost of construction of the house was met from the sale proceeds of the gold bars. Apart from the variation in the Explanationn, the Tribunal considered the Explanationn given by Smt. Ganesh Devi as improbable for the various reasons, namely, that there was no evidence to prove that any lands had been gifted to her by her father from which she could have derived income of Rs. 25,000.00 and that there was no evidence to show that she had saved Rs. 35,000.00 out of the money given to her for household expenses. The Tribunal also found it difficult to believe that Smt. Ganesh Devi would have thought it necessary to purchase gold with her savings and bring the gold into India instead of bringing the money itself which under the circumstances would have been easier for her to do. The Tribunal also gave cogent reasons for rejecting the evidence of Panna Lal unsupported as it was by his account books. The Tribunal considered that the evidence of the invoices produced by the assessed was not sufficient to prove the alleged purchase of gold from Panna Lal. The Tribunal also rejected the evidence of Ram Parkash in view of the very unsatisfactory nature of the account books produced by him. It would, thus, appear that the Tribunal considered every piece of evidence which was placed before it by the assessed in Explanationn of the source of the cost of construction of the house. This is not a case thereforee, of the Tribunal not considering any relevant evidence or of basing its findings on irrelevant evidence or on conjectures or surmises. We do not consider the conclusions arrived at by the Tribunal as either being perverse or such as no person judicially acting and properly instructed as to the relevant law could have come. thereforee, we see no valid reasons to interfere with these findings of fact of the Tribunal which had been arrived at after a proper appraisement of all the evidence placed before it.
(11) In support of his second contention, namely, that the rejection of the Explanationn of the assessed with regard to the source of the cost of construction did not by itself justify the conclusion that the amount in question represented the assessed's own income from undisclosed sources, the learned counsel for the assessed has referred to the decision of the Supreme Court in Commissioner of Income-tax v. Daulat Ram Rawatmull already referred to and also to a decision of the Kerala High Court in K. S. Kannan Kanhi v. Commissioner of Income-tax : 72ITR757(Ker) . In the case before the Supreme Court, the question for consideration was whether a sum of Rs. 5 lakhs representing the fixed deposit in the name of B, one of the partners of the assessed-firm could be treated as the income of the assessed-firm from undisclosed sources. The assessed-firm had six partners and the fixed deposit of Rs. 5 lakhs was in the name of B, one of the partners. The assessed-firm was called upon to explain the source of the fixed deposit and it stated that the fixed deposit belonged to B. The Explanationn offered by B with regard to the source of this amount was not accepted and the amount was treated as the income of the assessed-firm. The Supreme Court observed that :-
'THE question was not whether the amount of Rs. 5 lakhs belonged to B, but whether it belonged to the respondentfirm. The fact that B had not been able to give a satisfactory Explanationn regarding the source of Rs. 5 lakhs would not be decisive even of the matter as to whether B was or was not the owner of that amount. A person could still be held to be the owner of a sum of money even though the Explanationn furnished by him regarding the source of that money was found to be not correct. From the simple fact that the Explanationn regarding the source of money furnished by X, in whose name the money was lying in deposit, had been found to be false, it would be a remote and farfetched conclusion to hold that the money belonged to Y. There would be in such a case no direct nexus between the facts found and the conclusions drawn there from.'
(12) The facts of this case are clearly distinguishable from those of the case before us. As already stated, there were six partners of the assessed-firm and the fixed deposit was in the name of one of them. The rejection of the xplanation offered by the partner in whose name the deposit was found would obviously not justify the conclusion that the amount belonged to all the partners of the assesee-firm. The Supreme court was not laying down any general proposition but was having in view the particular facts of the case. In the case before us. on the other hand. the cost of construction of the house could have come either from the assessed himself or from his wife. There is no third person from whom the cost of construction of the house could have come. As a matter of fact, it is the assessed's own case that his wife being a Pardhanashin lady, gave to the assessed himself the gold to sell. thereforee, the immediate source of the money is the assessed himself. If the ultimate source, namely, the alleged sale of gold belonging to the asscsse's wife is disbelieved, then it would be a reasonable conclusion to draw that the amount in question represented the assesse's own income.
(13) In the case before the Kerala High Court, the assessed was called upon to explain the source of Rs. 46.563.00 being a credit entry in his books of account relating to toddy business which was started in August 17, 1950, and a sum of Rs. 14.250.00 and Rs. 3,000.00 representing the purchase price of certain immoveable properties. The assessed's Explanationn was that these amounts represented the past remittances from Ceylon out of the earnings of the family and from savings from agricultural property. The Explanationn was not accepted and the total amount of Rs. 63,813.00 was treated as the assessed's income from undisclosed sources. The High Court taking note of the fact that except some agricultural properties, whose annual income came to about Rs. 6,000.00 according to the assessed, it had no known source of income in India until it started the toddy business in 1950 and that there was no material in the case even to raise a reasonable suspicion that the assessed indulged in any activity of an income earning nature in the accounting year or in prior years, held that in these circumstances a finding that the sum of Rs. 60 thousand and odd found with the assessed must be its income from undisclosed sources during a period of about seven and a half months prior to August 17, 1950 appeared a little preposterous. Here, again the facts arc quite dissimilar to those in the case before us. The assessed was admittedly carrying on business as a partner of the firm and also letting out his own rollers on hire. He was, thereforee, indulging in an activity of an income-earning nature in the relevant accounting year. The rule laid down by the Kerala High Court cannot, thereforee, be held to be applicable to the present case.
(14) The Kerala High Court was in fact appliyng the rule laid down by the Supreme Court in the earlier cases, namely, Govindarajulu Mudaliar v. Commissioner of Income-lax : 34ITR807(SC) Kale Khan Mohammad Hanif v. Commissioner of Income-fax : 50ITR1(SC) and Commissioner of Income-lax v. Ganapathi Mudaliar : 53ITR623(Bom) . In the case of Govindarajulu Mudaliar, the Supreme Court held that :-
'WHERE an assessed fails to prove satisfactorily the source and nature of amounts received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. Where the Explanationns of the assessed as regards amounts shown in the account books of a firm of which he was a partner, as credits from him, were rejected as untrue, it was open to the Income-tax Officer and the Appellate Tribunal to hold that they represented the concealed income of the assessed.'
(15) In Roshan Di Hatti v. Commissioner of Income-tax : 85ITR370(Delhi) , a Division Bench of this court applied the rule laid down by the Supreme Court in Govindarajulu Mudaliar's case and the other cases referred by the Kerala High Court. In that case, the assessed, who migrated from Lahore to Delhi during the partition days, started a jwellery shop in Delhi on March 31, 1948. The same day a credit entry of Rs. 3,33,414.00 was made in his books of account out of which amount, the sum of Rs. 2,92,340.00 represented the value of gold ornaments, bullion and precious stones and the balance of Rs. 41,074.00 represented cash. He had not at any time till then submitted an income-tax return or been assessed to tax either in Lahore or in Delhi. Nor had he made any disclosure to the Income tax Officer regarding the assets brought from Lahore, pursuant to the press-note issued by the Government of India in June, 1952, requiring all evacuees to declare their correct financial position. When called upon by the Income-tax Officer to explain the source of the capital so introduced in the business, the assessed stated that the assets entered as capital in the business had been brought by him at the time of migration from Lahore. The Income-tax Officer rejected the evidence produced by the assessed as unsatisfactory and held that the assessed had brought from Lahore only assets of the value of Rs. 20,000.00 and treated the balance of the capital introduced in the business as income from undisclosed sources. On appeal, the Appellate Assistant Commissioner estimated the assets brought by the assessed from Lahore at Rs. 1 lakh and held that the balance of Rs. 2,33,414.00 could be assessed as income from undisclosed sources. The Appellate Tribunal affirmed the order of the Appellate Assistant Commissioner. This Court held that the finding of the Tribunal regarding the value of the assets brought by the assessed from Lahore had been arrived at on a consideration of the circumstances of the case and the relevant material on record and that on the facts, there was material for the Tribunal for coming to the conclusion that Rs. 2,33,414.00 represented income from undisclosed sources. In our view, the Tribunal was right under the circumstances in drawing the inference that the amount in question represented the assessed's own income from undisclosed sources.
(16) As regards question No. 2, the only contention advanced by the learned counsel for the assessed is that as against the certificate of tile architect regarding the cost of construction of the house, there was no other evidence before the Tribunal on the basis of which it can come to the conclusion that the cost of construction was Rs. 84,000.00. We cannot accept this contention also. According to the statement of Smt. Ganesh Devi, full accounts had been kept of the cost of construction. The assessed, however failed to produce his accounts. He filed only a certificate of an architect which at best is only an estimate of the cost of construction. It is open to the Income-tax authorities not to accept this estimate and to arrive at their own estimate of the cost of construction based upon their own experience. Similarly, it is open to the Tribunal also to arrive at its own estimate of the cost of construction based upon its experience. It cannot, thereforee, be said that the finding of the Tribunal with regard to the cost of construction of the house was not based upon any evidence.
(17) In the result, we answer both the questions in the affirmative, i.e., in favor of the Revenue and against the assessed. But in the special circumstances of the case, there shall be no order as to costs.