C.K. Banerji, J.
1. This reference under Section 256(2) of the I.T. Act 1961, arises out of the income-tax assessment of Sri Bhupesh Chandra Paul also known as B. C. Paul, the assessee, for the assessment year 1965-66.
2. The facts found and/or admitted in these proceedings are shortly as follows:
In his return filed for the said assessment the year assessee disclosed receipt of Rs. 1,58,250 but claimed the same to be exempt from tax being casual receipts from horse racing. In support, the assessee filed copies of five betting memos in the letter-head of K. N. Chakraborty, a book-maker, recording that between the 21st November, 1964, and the 4th February, 1965, the assessee had on five different dates won in bets on horses sums aggregating to Rs. 1,58,250. In answer to queries of the ITO the assessee by his letter dated the 5th September, 1978 stated, inter alia, that he had been interested in racing for only a limited period, had visited the races with a friend since deceased, had consulted the books and lists of the Royal Calcutta Turf Club and had placed bets from his office with the said bookmaker, K. N. Chakraborty. Being examined by the ITO he stated that he did not remember the names of any of the winning horses or the fees charged for entering the race course. Being asked to produce the said K. N. Chakraborty and the latter's books the assessee sought to retract his earlier statements and by his letter dated 1 8th September, 1970, stated that he had placed his bets through his friend, one S.R. Paul.
3. Pursuant to a summons issued under Section 131 of the I.T. Act, 1961, K.N. Chakraborty appeared before the ITO and deposed. He admitted the said transactions with the assessee but could not produce his books of account in support and stated that they had been lost by theft. He also admitted that his licence as a book-maker had not been renewed by the Royal Calcutta Turf Club in March, 1969, as he was a tax defaulter. The ITO obtained further statements from the assessee to the effect that he had never bet on horses except during the said period. The ITO also examined S. R. Paul who stated that he had collected, cheques from K. N. Chakraborty on occasions and had placed bets for the assessee with K. N. Chakraborty at the race course.
4. The ITO disbelieved the assessee's case that he had won the said amount on horse racing in view of the fact that the assessee had placed his bets only in five race meetings, in every one of which he won between Rs. 29,000 to Rs. 34,000. He also disbelieved that the books of K. N. Chakraborty had been lost. He found that at least three other persons had similar transactions with K. N. Chakraborty and had won large amounts. The ITO came to the conclusion that the transactions of the assessee with K.N. Chakraborty were name-lending transactions, that the assessee had failed to discharge the onus of proving the nature and source of the said receipts and held the same to be the income of the assessee from undisclosed sources.
5. The assessee appealed against the said assessment. It was contended before the AAC that the assessee had discharged his primary onus of proving the source of the receipt. The account of K. N, Chakraborty showed that the assessee had received the said amount. The fact that the relevant bettings could not be established with reference to the books of K. N. Chakraborty, it was contended, should not go against the assessee who had received the amount by account payee cheques and that the ITO, in holding that the said amount had not been received by the assessee as gains from betting, proceeded on suspicion. With regard to the alleged collusive transactions of K. N. Chakraborty with other parties relied on by the ITO, it was stated that similar additions made by the ITO, of other betting receipts from K. N. Chakraborty by other assessees, had been deleted on appeal. The AAC took the view that the collusion between the assessee and K. N. Chakraborty suspected by the ITO had not been proved. He held that the source of the amount in dispute had been shown by the assessee and the evidence thereof could not be rejected on suspicion. The absence of books of account and suspected transactions between the book-maker and his clients should be considered and investigated in the assessment of the book-maker and not of the assessee. He, therefore, held that the said sum was betting receipts and being casual income could not be added to the total income of the assessee and deleted the addition made by the ITO.
6. Being aggrieved by the order of the AAC, the revenue appealed to the Income-tax Appellate Tribunal.
7. It was contended on behalf of the revenue in the appeal that the AAC had failed to appreciate the evidence which did not prove the alleged winnings of the assessee. The assessee contended otherwise relying on the findings of the AAC. The assessee also referred to certain other orders of the Tribunal where the transactions with K. N. Chakraborty had been accepted as genuine.
8. The Tribunal, after considering the respective contentions of the parties, set aside the order of the AAC and confirmed the assessment as made by the ITO mainly on the following grounds:
(i) The assessee's story that he had won phenomenal amounts on the race course and then stopped attending the race meets altogether was unbelievable and particularly by reason of the discrepancies in the statements the assessee made at different times.
(ii) K. N. Chakraborty was found to be involved in other cases in similar circumstances and his credentials had not been accepted by the Tribunal in several orders.
(iii) The dealings of Chakraborty with the assessee and other parties in cheques contrary to the normal practice of book-makers who settled their transactions in cash indicated that the bank account of Chakraborty was being utilised by the assessee.
(iv) It being admitted that Rs. 1,58,250 constituted the income of the assessee and the assessee having failed to establish that the said amount was entitled to be exempted under Section 10(3) of the I.T. Act, 1961 and it being found that the said amount did not represent the assessee's winning from bettings on horse racing must be assessed as taxable income.
9. On the application of the assessee under Section 256(2) of the I.T. Act, 1961, this court directed the Tribunal to draw up a statement of the case and to send up the following question of law for the opinion of this court:
'Whether there was any legal finding and/or material before the Tribunal to hold that the sum of Rs. 1,58,250 was not the income of the assessee from horse racing and whether such finding of the Tribunal is unreasonable and perverse?'
10. Mr. Subrata Roy Chowdhury, learned counsel for the assessee, contended at the hearing that the Tribunal had based its decision on suspicion, conjecture and surmise. There was in fact no discrepancy in the statements of the assessee as found by the Tribunal. The assessee initially stated that he used to instruct K. N. Chakraborty from his office to bet on specified horses. In his letter dated 18th September, 1970, he stated that this was done through his agent, S. R. Paul. The Tribunal relied on cases where transactions of K. N. Chakraborty with other persons had been disbelieved, but there were similar transactions of K. N. Chakraborty which were accepted and on the basis of transactions with other persons, it could not be inferred that his transactions with the assessee were bogus. The Members of the Tribunal had imported their personal knowledge as to the manner of betting and settlement with bookies and conclusions reached thereby were wholly irrelevant. If the Tribunal had relied on any irrelevant material its entire conclusion would be vitiated. Mr. Roy Chowdhury submitted that the assessee had discharged the onus of proving his claim for exemption by adducing the following evidence :
1. Memo of bets in the letter-head of K. N. Chakraborty.
2. The admissions of K. N. Chakraborty not challenged by cross-examination.
3. The supporting evidence of S. R. Paul on which there was also no cross-examination by the revenue.
4. That payments were received from K. N. Chakraborty by account payee cheques.
11. The assessee having thus discharged the initial burden, the onus shifted on to the revenue. No evidence or materials were brought in by the revenue to prove that the apparent was not real.
12. The conclusion of the Tribunal that the assessee had won Rs. 1,58,250 on the race course was entirely unbelievable and false and was erroneous. Whether K. N. Chakraborty had lost his books of account or not or that some of the transactions of K. N. Chakraborty had been disbelieved or that the assessee having attained success in his betting had restrained himself from betting any further were irrelevant and the findings of the Tribunal based thereon were unreasonable and perverse.
13. Mr. Roy Chowdhury also contended that the questions raised by the assessee had been reframed by this court and condensed into one question so as to bring out the real controversy between the parties and was not a new question.
14. In support of his contentions Mr. Roy Chowdhury cited the following decisions:
Dhirajlal Girdharilal v. CIT : 26ITR736(SC) . This decisionwas cited for the following observations of the Supreme Court (pp. 739-740): '.....if the court of fact, whose decision on a question of fact is final, arrives at its decision by considering material which is irrelevant to the enquiry, or by considering material which is partly relevant and partly irrelevant, or bases its decision partly on conjectures, surmises and suspicion, and partly on evidence, then in such a situation clearly an issue of law arises..... It is well established that when a court of factacts 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.'
15. Omar Salay Mohamed Sait v. CIT : 37ITR151(SC) was also cited for the following observations of the Supreme Court (p. 170):
'.....the Income-tax Appellate Tribunal is a fact-finding Tribunal andif 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 assessee must have been considered with due care and the Tribunal must 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 assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, 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 that sort, its findings, even though on questions of fact, will be liable to be set aside by this court.'
16. CIT v. Daulat Ram Rawatmull : 87ITR349(SC) . Here, the asses-see, a firm, had obtained an overdraft upon security, inter alia, of a fixed deposit in the name of a son of one of its partners. The ITO, on reassess- ment, held that the said deposit represented the concealed income of the assessee. This was upheld by the Tribunal. On a reference, this court held that there was no material before the Tribunal to hold that the said fixed deposit was the concealed income of the assessee. On a final appeal, the Supreme Court observed as follows (p. 360):
'The onus to prove that the apparent is not real is on the party who claims it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent-firm even though the receipt had been issued in the name of Biswanath, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of Biswanath.'
17. CIT v. Best and Co. (P.) Ltd. : 60ITR11(SC) . This decision was cited for the following observations of the Supreme Court (p. 18):
'When sufficient evidence, either direct or circumstantial, in respect of its contention was disclosed by the revenue, an adverse inference could be drawn against the assessee if he failed to put before the department material which was in his exclusive possession. This process is described in the law of evidence as shifting of the onus in the course of a proceeding from one party to the other. There is no. reason why the said doctrine is not applicable to income-tax proceedings. While the income-tax, authorities have to gather relevant material to establish that the compensation given for the loss of agency was a taxable income, adverse inference could be drawn against the assessee if he had suppressed documents and evidence which were exclusively within his knowledge and keeping.'
18. Mr. Roy Chowdhury also cited the following decisions: (a) Parry's (Calcutta] Employees' Union v. Parry and Co. Ltd., : (1966)ILLJ535Cal , (b) Bai Velbai v. CIT : 49ITR130(SC) and (c) Malabar Co-operative Central Bank Ltd. v. CIT : 101ITR87(Ker) to show how the courts have dealt with and expounded the concept of perversity.
19. He submitted that the assessee had specifically raised the question of perversity and this court refrained all the questions including that on perversity by a comprehensive question. In this connection, Mr. Roy Chowdhury cited the following decisions :
CIT v. Scindia Steam Navigation Co. Ltd. : 42ITR589(SC) . The following observations of the Supreme Court in this case were relied on (pp. 609-612): 'Section 66 confers on the court a power to direct a reference only where the Tribunal was under a duty to refer under Section 66,and it is, therefore, subject to the same limitations as Section 66(1).....All that Section 66(1) requires is that the question of law which is referred to the court for decision on which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the Section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over-refinement of the position to hold that each aspect of a question is itself a, distinct question for the purpose of Section 66(1) of the Act.'
20. Bhanji Bagawandas v. CIT : 67ITR18(SC) . Here the Supreme Court reiterated its observation in Scindia Steam Navigation Co. Ltd. : 42ITR589(SC) .
21. CWT v. Mahadeo Jalan : 86ITR621(SC) . Here, the Supreme Court observed that it had power to resettle or to reframe a question formulated by the Tribunal so long as a new and different question was not raised and the High Court also had the power to reframe a question so as to bring out the real issues between the parties.
22. Central India Industries Ltd. v. CIT : 99ITR211(Cal) . Following the decision of the Supreme Court in CIT v. Anusuya Devi : 68ITR750(SC) , it was held by this court that a question may be refrained to clarify or to pinpoint the real issues or for similar other reasons.
23. Mr. B. L. Pal, learned counsel for the revenue, contended on the other hand that the conclusion of the Tribunal was the cumulative effect of the materials considered by it, and such materials should not be studied or examined in isolation but its total effect should be kept in view. If there was some evidence to support the findings of the Tribunal, this court should not interfere with such findings in its advisory jurisdiction. Mr. Pal submitted that as the assessee was claiming an exemption in this case on the ground that the receipts in dispute were his race winnings the onus necessarily lay on the assessee to prove the same. The question referred as reframed was a new question not asked for by the assessee and, therefore, this court should decline to answer the same. The assessee, in any event, had failed to prove his case and the said amount, therefore, must be held to be income liable to tax. None of the following basic findings of the Tribunal had been challenged by the assessee:
(1) The story of the assessee's winning on the race course was entirely unbelievable and false.
(2) There were discrepancies in the statements made, by the assessee.
(3) The bank account of Shri K. N. Chakraborty had been used by the assessee for his own advantage.
(4) The credentials of K. N. Chakraborty were not accepted in several orders of the Tribunal.
24. The following decisions were cited on behalf of the revenue :
1. Sree Meenakshi Mills Ltd. v. CIT : 31ITR28(SC) , where the Supreme Court observed as follows (p. 37):
'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.' 2. Homi Jehangir Gheesta v. CIT : 41ITR135(SC) .
This decision was cited for the following observations of the Supreme Court (at p. 141):
'We 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..... We must make it clear that we do notthink that those decisions required that the order of the Tribunal must be examined sentence by sentence, through the microscope as it were, so as to discover the minor lapse here or an incautious opinion there to be used as a peg on which to hang an issue of law. In view of the arguments advanced before us it is perhaps necessary to add that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions.' 3. Bai Velbai v. CIT : 49ITR130(SC) . In this case, the amount of high denomination notes encashed by the assessee in the relevant assessment year was treated as her income from undisclosed source. On final appeal the Supreme Court observed as follows (p. 133, 136):
'As this court observed in Sree Meenakshi Mills v. Commissioner of Income-tax : 31ITR28(SC) , a finding of fact does not alter its character as one of fact merely because it is itself an inference from other basic facts; but a finding on a question of fact is open to attack under Section 66 as erroneous in law when there is no evidence to support it or if it is perverse or has been reached without due consideration of the several matters relevant for such a determination..... We have read the orderof the Tribunal as a whole and we are not unmindful of the observation made in the case of Homi Jehangir Gheesta : 41ITR135(SC) , that in considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions.' 4. CIT v. Ramakrishna Deo : 35ITR312(SC) . Here the question was if the income derived by the assessee from forests by sale of timber was agricultural income and exempt from tax under the Indian I.T. Act, 1922. On a reference the Orissa High Court held that the onus was upon the revenue to prove that the income derived from the forest was chargeable to tax and it had failed to establish that the income derived from sale of trees was not agricultural income. On appeal by the revenue the Supreme Court observed as follows (p. 316):
'At the very outset, we should dissent from the view expressed by the learned judges that the burden is on the department to prove that the income sought to be taxed is not agricultural income. The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption is claimed is under the Income-tax Act.' 5. R. B. Seth Champalal Ramswarup v. CI7 : 60ITR493(SC) .
6. Lakshmiratan Cotton Mills Co. Ltd. v. CIT : 73ITR634(SC) . These cases were also cited for similar observations by the Supreme Court.
7. Mahmudabad Properties (P.) Ltd. v. CIT : 85ITR500(Cal) . In this case the Tribunal took notice of the fact that there had been a steady increase in land value during the period from 1954 to 1961. The assessee contended that such importation of personal knowledge was not permissible in law. A Division Bench of this court, following Forest-side Properties (Chingford] Ltd. v. Pearce  39 TC 665 (CA), held that matters of local knowledge could be relied on by the Tribunal, the members whereof belonged to the locality and having an intelligent concern with the local affairs.
8. In re W (An Infant)  2 WLR 1011 ;  2 All ER 49 (HL). This was an adoption case and was cited for the following observations of the House of Lords :
'And, be it observed, 'reasonableness' or 'unreasonableness', where either word is employed in English law, is normally a question of fact and degree and not a question of law so long as there is evidence to support the finding of the court..... Two reasonable parents canperfectly reasonably come to opposite conclusions on the same set of facts without forfeiting their title to be regarded as reasonable. The question in any given case is whether a parental veto comes within the band of possible reasonable decisions and not whether it is right or mistaken. Not every reasonable exercise of judgment is right, and not every mistaken exercise of judgment is unreasonable. There is a band ofdecisions within which no court should seek te replace the individual's judgment with his own.' 9. Secretary of State for Education and Science v. Metropolitan Borough of Tameside  3 All ER 665. Here the House of Lords laid down the principles for reasonable exercise of power by an authority. Several unreported decisions of this court, viz., Income-tax References Nos. 599 and 600 intituled M. M. Murarka & Co. v. CIT, Income-tax References Nos. 15 and 16 of 1971 intituled Worth Trading Co, v. CIT and P. C. Sharma & Sons v. CIT, were also cited and relied on by the revenue.
25. On the question of perversity two decisions of the Supreme Court in G. Venhataswami Naidu & Co. v. CIT 0065/1958 : 35ITR594(SC) and CIT v. Rajasthan Mines Ltd. : 78ITR45(SC) were cited on behalf of the revenue.
26. The revenue also contended that a decision based on material partly irrelevant would be vitiated as a misdirection in law and would not be perverse and in this context cited two decisions of the Supreme Court in CIT v. Indian Woollen Textile Mills : 51ITR291(SC) and CIT v. Radha Kishan Nandlal : 99ITR143(SC) .
27. It was next contended that a specific question had to be raised when the conclusion of the Tribunal was sought to be impugned as perverse. Such a question, it was contended, was not before the court. In this connection a decision of the Supreme Court in CIT v. Imperial Chemical Industries (India) (P.) Ltd. : 74ITR17(SC) was cited.
28. It was next urged that even if the Tribunal had indulged in some speculation, if there were facts from which the conclusion could be drawn, the same should not be disturbed by the court. For this proposition reliance was placed on the decision of the Supreme Court in Bhaichand Amoluk & Co. v. CIT : 44ITR511(SC) , where the Supreme Court reiterated its observations in Homi Jehangir Gheesta : 41ITR135(SC) .
29. It was also contended on behalf of the revenue that a question of fact arising from the non-acceptance by the income-tax authorities of the explanation of the assessee could not give rise to a question of law. In this connection a decision of the Supreme Court in Newton Chikli Collieries Ltd. v. CIT : 44ITR495(SC) was cited for the following observations (p. 499):
'If the income-tax authorities chose not to accept these explanations as correct, that does not mean that the finding as to inflation of wages at which they arrived was a finding based on no material. The materials were there ; what happened was that the income-tax authorities did not accept as correct the explanations offered by the assessee-company. We do not think that the non-acceptance of the explanations given by theassessee-company converts the question of the inflation of wages, which is essentially a question of fact, into a question of law.'
30. It was also contended that in a reference the High Court: exercising an advisory jurisdiction could not reappraise the facts and evidence as urged by the assessee. The following observations of the Supreme Court in Imperial Chemical Industries (India) (P.) Ltd. : 74ITR17(SC) , in this connection were cited (p. 23):
'It is well established that the High Court is not a court of appeal in a reference under Section 66(1) of the Act, and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal. It is the duty of the High Court while hearing the reference to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts.'
31. It was lastly contended on behalf of the revenue that this court while refraining a question could not reopen an enquiry. The questions of fact or law were limited by the order of the Tribunal.
32. The revenue cited a decision of the Supreme Court in CIT v. Smt. Anusuya Devi : 68ITR750(SC) .
33. On behalf of the revenue the following decisions were also cited.
34. CIT v. Turner Morrison & Co. Ltd. : 114ITR505(Cal) , Shankar Industries v. CIT : 114ITR689(Cal) , Reform Flour Mills (Pvt.) Ltd. v. CIT : 115ITR598(Cal) . It is not necessary to deal with the above decisions in detail.
35. In the instant case it cannot be said that the Tribunal did not consider any material on record. The case of the assessee was that he was never a regular punter and only in five race meetings between November, 1964, and February, 1965, he allegedly placed his bets and won Rs. 1,58,009. Neither before or after the said period he took any interest in racing nor did he bet. This case the Tribunal did not believe and did not accept. The Tribunal noted that on the 5th September, 1970, the assessee stated before the ITO categorically that he used to bet outside the race course from his office by instructing K. N. Chakraborty to bet on specific horses. Only a few days thereafter, i.e., on the 18th September, 1970, the assessee wrote a letter to the ITO giving a completely different version as to how the bets were placed by him. In this letter he introduced his friend and employee, S. R. Paul, and stated that the betting was done by the assessee through the latter. S. R. Paul, who used to visit the race course and make spot betting on behalf of the assessee through K. N. Chakraborty, was not available to corroborate the case of the assessee and loss of such books was also not accepted by the Tribunal. The Tribunal did not believe that the assessee had a phenomenal run ofluck for a short period particularly as the assessee after his substantial winnings did not try his luck any further. This according to the Tribunal was not consistent with normal human behaviour. The relevant conclusions of the Tribunal cannot be said to be unreasonable or perverse or such that no reasonable man could come to the same. The Tribunal in assessing the probabilities from ascertained facts could not be said to have proceeded only on conjectures or surmises or suspicions.
36. In the view we have taken it is not necessary for us to go into the other contention of the revenue as to whether the question referred could be said to be a new question not asked for by the assessee. We, however, note that the said contention is not without substance. The findings and conclusion of fact by the Tribunal remain unchallenged by the assessee and only the ultimate conclusion is sought to be assailed in this reference. On that ground also the assessee is not entitled to succeed in this reference.
37. The first part of the question referred is answered in the affirmative and the second part thereof is answered in the negative, both being in favour of the revenue. We make no order as to costs.
Dipak Kumar Sen, J.
38. I agree.