1. At the instance of the Department (Revenue), the following questions were referred to this court for its opinion :
'(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in (a) deleting the entire addition of Rs. 2,87,000, and (b) allowing interest of Rs. 31,269 for the assessment year 1957-58
(2) Whether the Appellate Tribunal's finding is based on valid and relevant materials and a reasonable view to tab on the facts of the case ?'
2. On the basis that the credit entries in the names of various multani bankers appearing in the books of the assessee did not represent genuine transactions and that there was information to the effect that such multani bankers had only indulged in hawala transactions by merely lending their names, the Income-tax Officer reopened under section 147(a) of the Income-tax Act, the assessment for the assessment year 1957-58, which was completed on July 23, 1958, on a total income of Rs. 15,472. The assessee's explanation did not find favour with the assessing officer and consequently by his order dated January 31, 1970, the assessing officer determined the total income at Rs. 3,08,999. The assessee's appeal to the Appellate Assistant Commissioner was unsuccessful because the Appellate Assistant Commissioner accepted the reasoning of the assessing officer. The assessee took the matter in appeal to the Income-tax Appellate Tribunal. The Tribunal accepted the explanation submitted by the assessee that the borrowings from multani bankers were all genuine transactions and held that the fact that the assessee had produced the charged hundis was enough to accept her explanation.
3. The Revenue takes an exception to such disposal by the Tribunal. According to the learned counsel appearing for the Revenue, the Tribunal ought not to have accepted the interested testimony of the assessee, when even according to her, there are other documents, particularly crossed even, which are said to have been issued by the assessee in favour of some of the multani bankers in partial payment of interest. We find that the Revenue's contention sounds reasonable. It might be that any judicial authority can accept any statement of an assessee, when that is the only piece of evidence available in that particular case, and order assessment on such sole evidence. But when, even according to the assessee, there is other documentary evidence of corroborative value and the same is within the reach of the assessee, in such a case, we are of the opinion that a judicial body cannot act on such interested testimony of the assessee alone Here, admittedly, some crossed cheques were issued to the alleged multani bankers by the assessee; yet the assessee did not care to summon those cheques. Hence, the isolated statement of the assessee has no evidentiary value at all. Any finding on such unworthy evidence deserves to be characterised as perverse and has to be set aside.
4. Nevertheless, the learned counsel for the assessee brought to our notice the following decisions, namely, Gouri Prasad Bagaria v. CIT : 42ITR112(SC) , Homi Jehangir Gheesta v. CIT : 41ITR135(SC) , CIT v. M. Ganapathi Mudaliar : 53ITR623(Bom) and Coimbatore Spinning & Weaving Co. Ltd. v. CIT : 95ITR375(Mad) . We must straightway point out that in none of these cases the question as it has arisen before us was presented before the learned judges who had disposed of these cases. In all these cases, it was found that the Tribunal accepted the explanation put forward by the assessee and further there was no other material either pleaded by the assessee or suggested by the Revenue.
5. In Gouri Prasad Bagaria v. CIT : 42ITR112(SC) , the learned judges of the Supreme Court observed (p.115) :
'Where the assessee's statement is believed, there is obviously material on which the finding is based.'
6. It was further held that in such a case, the court shall not interfere with such finding of fact based on the sole material available in that case.
7. In Homi Jehangir Gheesta v. CIT : 41ITR135(SC) , what is laid down by the Supreme Court is that it is not in all cases that by mere rejection of the explanation of the assessee, the character of a particular receipt as income can be said to have been established; but where the circumstances of the rejection are such that the only proper inference is that the receipt must be treated as income in the hands of the assessee, there is no reason why the assessing authority should not draw such an inference and such an inference is an inference of fact and not of law. We do not see as to how this decision really helps the assessee in the present case.
8. The learned counsel for the assessee laid emphasis on the following observations of their Lordships of the Supreme Court in CIT v. M. Ganapathi Mudaliar : 53ITR623(Bom) :
'With great respect, the High Court did not appreciate the findings of the Tribunal recorded in the supplementary statement. The Tribunal had accepted the earlier findings of the court, recorded in the order dated July 31, 1958, but in spite of discarding the theory of benami on the material before it, it came to the conclusion that no other conclusion except that 87,500 dollars was the income of the assessee was possible.
Once it is held, as we do hold, that there was material for the finding of the Tribunal that 87,500 dollars represented the income of the assessee, no other issue survives.'
9. In that case, the only available evidence placed before the Tribunal was the statement of the assessee. It is in such circumstances that the Tribunal accepted the statement. It was, therefore, held by the Supreme Court that when that was the only evidence available and when such evidence was accepted by the Tribunal, it was not open to the High Court to interfere with such a finding of fact.
10. A Division Bench of this court in Coimbatore Spinning & Weaving Co. Ltd. v. CIT : 95ITR375(Mad) observed (p.382) :
'Once the Tribunal finds that there were excess stocks after rejecting the explanation of the assessee, the conclusion is inescapable that the excess stocks should have come from undisclosed sources. As already pointed out, the finding of the Tribunal that there were excess stocks cannot be interfered with by this court, as it is exclusively a matter for the Tribunal to accept or reject the assessee's explanation on the facts and circumstances of this case.'
11. Their Lordships were cautious enough to say that depending upon the circumstances of each case, the finding of the Tribunal will be binding on this court. They have not laid down any universal principle of law to the effect that in all cases, the finding of fact rendered by the Tribunal is binding on this court.
12. We have pointed out that in this case, the Tribunal acted on unworthy evidence and, therefore, such a finding has to be rejected as perverse. As a matter of fact. the law of evidence mandates that if the best evidence is not placed before the court, an adverse inference can be drawn as against the person who ought to have produced it. In this case, there were crossed cheques, but they were not produced. Then, the finding of the Tribunal resting solely on the interested statement of the assessee without available corroborating material, is hardly acceptable and the Revenue is, therefore, justified in contending that such a finding deserves to be set aside.
13. The immediate question is, whether the matter has to be remanded or has to be dealt with on the material existing in this case. The assessment order is in respect of the assessment year 1957-58. We are now in 1983. At any rate, the assessee did not avail of the opportunities available to her before the Tribunal to summon the crossed cheques or produce additional material to corroborate her interested statement. Hence, we are not prepared to remand the matter.
14. Taking into consideration. the difference of peak credit transactions between the assessment years 1956-57 and 1957-58 (under reference), a sum of Rs. 16,000 is held to be the income earned by the assessee under 'other sources' (for 1957-58). As a matter of fact, this is the approach the Appellate Assistant Commissioner has made. Even the Tribunal has adopted the same approach. We, therefore, in the above circumstances, hold that the assessee has to account for the income of Rs. 16,000 under the head 'Other sources'.
15. The only other consideration relates to Rs. 31,269 said to have been paid towards interest by the assessee. Since the liabilities themselves were in doubt and they are now rejected, the assessee is not-entitled to claim Rs. 31,269 as an item of expenditure by way of interest. Therefore, the only conclusion that is possible is that even this amount will form part the income earned by the assessee under the head 'Other sources'.
16. The result will be, the assessment will have to be made on the character of the above-said two sums as income earned by the assessee under 'other sources', in addition to the admitted amount.
17. The questions are answered in the negative and against the assessee the circumstances, we make no order as to costs.