1. This petition has been filed by the Additional Commissioner of Income-tax, Delhi-II, under Section 256(2) of the Income-tax Act, 1961, praying that the Income-tax Appellate Tribunal be directed to submit the statement of case and refer the following questions of law which are said to have arisen out of its order, in I.T.A. No. 1898/69-70 and I.T.A. No. 865/69-70, relating to the assessment year 1963-64 :
'(1) Whether the Tribunal had any material to reach the finding that the asssessee had satisfactorily explained the moneys entered in the exercise book ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 30,000 could not be deemed to be the income of the assessed ?'
2. The original assessed, Chetan Dass (now deceased), was an individual, who derived income from purchase and sale of hing, supari, navan and from house property. The assessment year involved is 1963-64, for which the previous year ended on March 31, 1963. The Income-tax Officer had made an addition of Rs. 1,00,000, by way of income from undisclosed sources. Rs. 70,000 were added by reference to the following deposits :
(i) Rs. 20,000 in the accounts of Narain Dass Laxmi Chand ;
(ii) Rs. 10,000 in the accounts of Gopal Dass Udhav Dass ;
(iii) Rs. 20,000 in the accounts of Afghan Fruit Company ; and
(iv) Rs. 20,000 in the accounts of Hukam Chand Sadhu Ram.
3. Another sum of Rs. 30,000 was added because during the course of a raid, the sales tax authorities had seized in 1965, an exercise book, which showed that the assessed had advanced loans of two sums, Rs. 10,000 onMarch 26, 1963, and Rs. 20,000 on March 30, 1963. On Explanationn being called the assessed denied having advanced these sums. He denied that the entries in the exercise book related to his transactions. The Income-tax Officer held that the exercise book belonged to the assesssee, and that he had failed to explain the sources from which the loans recorded in it had been made. It was on this ground that he added Rs. 30,000 also as income from undisclosed sources.
4. The Appellate Assistant Commissioner in appeal held that the exercise book belonged to the assessed, but deleted the addition of Rs. 30,000 on the ground that it was more than covered by the withdrawals in the accounts of Gopal Dass, Udhav Dass, Narain Das Laxmi Chand and Afghan Fruit Company. The addition of Rs. 50,000 with reference to these accounts had been confirmed. Both the revenue and the assessed preferred appeals to the Appellate Tribunal, which confirmed the conclusion of the Appellate Assistant Commissioner on the ground that the advances were more than covered by the withdrawals in the accounts of the aforesaid three depositors. Without deciding the question about the ownership of the exercise book, the Tribunal confirmed the deletion of the addition of Rs. 30,000. The Tribunal also rejected an application of the revenue under Section 256(1) of the Act and declined to make a reference to this court on the ground that its findings were findings of fact based on evidence on record.
5. Mr. B. N. Kirpal, the learned counsel for the revenue, contended that the assesse had failed to link the withdrawals in the three accounts with the loans amounting to Rs. 30,000 advanced by him. In the absence of such a link, the amount was liable to be added as income from undisclosed sources. Reliance was placed on Commissioner of Income-tax v. Devi Prasad Vishwanath Prasad, : 72ITR194(SC) where the Supreme Court, relying on its earlier decision in Kale Khan Mohammad Hanij v. Commissioner of Income-tax, : 50ITR1(SC) , held that there was nothing in law to prevent the Income-tax Officer in an appropriate case from taxing both the cash credit, the nature and source of which was not satisfactorily explained and the business income estimated by him under Section 13 of the Indian Income-tax Act, 1922, after rejecting the books of account of the assessed as unreliable. This judgment, we are afraid, can be of no assistance to the revenue. The Supreme Court did not hold that the loan given in one account can, in no ease, be linked with or explained by reference to the earlier withdrawals in other accounts. The said judgment indicates that facts in each case have to be judged on their own merits.
6. In the present case, the Tribunal reached its conclusions by looking to the dates on which the loans of Rs. 30,000 were said to have been made(i.e., in March, 1963), and which made it clear that they were sufficiently:explained as being covered by withdrawals of Rs. 50,000 in the threeaccounts barely two months earlier (i.e., on January 19 and 24, 1963, andFebruary 9, 1963). The conclusion was strengthened by the short time lagbetween the withdrawals and the payment, which was only of about twomonths. It was held in Commissioners of Income-tax v. Bharat Engineeringand Construction Co., : 83ITR187(SC) ' what inference should be drawn from the facts proved is a question of fact and the Tribunal's finding on that question isfinal.' (Also see Commissioner of Income-tax v. Nelliappan, : 66ITR722(SC) ).
7. We are also satisfied that the inference drawn by the Tribunal from the facts proved on record was neither unreasonable, nor perverse, nor could it be said to be based on mere conjectures or surmises, nor could itbe said to be based on no evidence. The Tribunal was, thereforee; right in rejecting the revenue's prayers for referring the aforesaid questions to this court on the ground that no question of law had arisen from its order The petition under the circumstances is dismissed, but there shall be noorder as to costs.