Homi Jehangir Gheesta v. The Commissioner of Income-tax, Bombay — Supreme Court of India (S. K. Das, M. Hidayatullah and J. C. Shah, JJ.; judgment delivered by S. K. Das J.), Civil Appeal No. 24 of 1958, decided September 22, 1960. Income tax — assessment — income from undisclosed source — refusal by Appellate Tribunal to state a case — summary refusal by High Court to direct a reference — when a question of law arises from the order of the Tribunal — Indian Income-tax Act, 1922 (XI of 1922), ss. 23(3), 66, 66(2). The appellant encashed high-denomination currency notes of the value of Rs. 87,500 and, at different stages, gave three statements discrepant in material particulars as to how he received the amount. The Income-tax Officer, holding the true nature of the receipt not disclosed, assessed it as income from an undisclosed source for 1946-47 under s. 23(3); the appellate authority and the Income-tax Appellate Tribunal affirmed the assessment (Tribunal order dated October 7, 1955). The Tribunal refused a reference under s. 66 (order dated March 8, 1956), and the Bombay High Court summarily dismissed the appellant's petition under s. 66(2) on October 4, 1956. Held, dismissing the appeal with costs: (i) no question of law arose from the Tribunal's order; to apply the principles of Dhirajlal Girdharilal (1954) 26 I.T.R. 736 and Omar Salay Mohamed Sait (1959) 37 I.T.R. 151, the Tribunal's order must be read as a whole to see whether material facts and evidence, for and against, were properly considered and whether irrelevant considerations or prejudice vitiated the conclusion; those decisions do not require sentence-by-sentence examination of the Tribunal's order to discover minor lapses or incautious opinions on which to hang an issue of law; in weighing probabilities properly arising from the facts the Tribunal does not indulge in conjecture, surmise or suspicion. (ii) Mere rejection of the assessee's explanation does not invariably establish that a receipt is income; but where the circumstances of the rejection properly raise the inference that the receipt is income, the assessing authorities are entitled to draw it — such an inference being one of fact, not of law; nor was the Department required to prove by direct evidence that the amount was income. The Tribunal's findings on Bai Aloo's money, the father's conduct and the absence of evidence as to the mother's estate and the alleged investments were relevant considerations. Decisions explained: Dhirajlal Girdharilal; Omar Salay Mohamed Sait.
