1. The following question under Section 256(2) of the Income-tax Act, 1961, is involved in this reference:
'Whether the conclusion arrived at by the Tribunal that the loans in question represented the assessee's income from undisclosed sources was perverse in the sense that no reasonable man could come to the above conclusion ?'
2. The assessee is a private limited company. The assessment year involved is 1962-63 for which the accounting period ended on the 31st March, 1962. In the course of the assessment proceedings, the Income-tax Officer found that the assessee had shown Rs. 20,000 as loan in its books, taken from two parties, namely, Lakshmichand Paramanand and Lachman-das Lunidram. The assessee produced the alleged confirmatory letters from those parties before the Income-tax Officer in support of those two loans. The assessee's case was that Rs. 15,000 was advanced by Lakshmichand Paramanand and Rs. 5,000 was advanced by Lachmandas Lunidram. The Income-tax Officer served notices under Section 131 of the Income-tax Act on the alleged creditors but those notices came back unserved. The Income-tax Officer was not satisfied with the genuineness of those loans and accordingly he treated them as the assessee's income from undisclosed sources.
3. The appeal filed by the assessee was dismissed by the Appellate Assistant Commissioner before whom the assessee could not even establish the identity of those parties. On the facts found by the Income-tax Officer and in those circumstances, the Appellate Assistant Commissioner observed that it could not be held that the alleged loans were genuine.
4. The assessee thereafter filed further appeal. The Appellate Tribunal dismissed the same. The Tribunal held that mere filing of the confirmatory letters did not discharge the onus that lay on the assessee. The Tribunal further recorded that even before the Appellate Assistant Commissioner the assessee frankly admitted that it was not possible for the assessee to adduce any further evidence apart from those confirmatory letters. The Tribunal found that there was no material on the record even to establish the identity of the creditors.
5. It has been urged by Mr. A. K. Roy Choudhury, learned counsel for the assessee, that no reasonable man could have come to the above conclusion reached by the Tribunal and, therefore, its conclusion was perverse. We are, however, unable to accept his contention.
6. The Tribunal has taken all relevant facts into consideration as appears from its order including the materials on the record and has arrived at the aforesaid conclusion. To us it does not appear to be unreasonable or perverse.
7. In the premises, we answer the question in the negative and in favour of the revenue. There will be no order as to costs.
C.K. Banerji, J.