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JUDGMENT Chagla, CJ -A rather unusual case arises for our consideration on this reference. The assessee had at the material date, which is the 3rd April, 1947, a sum of Rs. 1,00,000 deposited with the Mahalaxmi Silk Mills Ltd., Bhavnagar. The joint account was in the name of the assessee and his brother and it is established that the assessee and his brother were the owners of this amount. The assessee and his brother purported to lend this sum of Rs. 1,00,000 to one Harkison Ratilal and Dilipkumar Trikamlal who executed promissory notes in their favour. On this very day, i.e., 3rd April, 1947, when the promissory note was executed by Harkison Ratilal and Dilipkumar Trikamlal, in the books of account of the Mahalaxmi Silk Mills Ltd., Bhavnagar, the sum of Rs. 1,00,000 was debited to the assessee and his brother and on the same day the New Mahalaxmi Silk Mills Ltd. in Bombay credited this sum of Rs. 1,00,000 in the name of Harkison Ratilal and Dilipkumar Trikamlal. Therefore in appearance the transaction was this that the assessee and his brother lent and advanced the sum of Rs. 1,00,000 to Harkison Ratilal and Dilipkumar Trikamlal from the moneys which they had in Bhavnagar and Harkison Ratilal and Dilipkumar Trikamlal in their turn advanced this money to the New Mahalaxmi Silk Mills Ltd., Bombay. The Tribunal has found, and that finding cannot be disputed before us, that Harkison Ratilal and Dilipkumar Trikamlal were the benamidars of the assessee and his brother. Therefore in understanding and appreciating the true nature of this transaction we must eliminate Harkison Ratilal and Dilipkumar Trikamlal. Therefore, in substance, the transaction was this that the assessee and his brother asked the Mahalaxmi Silk Mills Ltd., Bhavnagar, to transfer the sum of Rs. 1,00,000 which stood to their credit to the account of the new Mahalaxmi Silk Mills Ltd., Bombay. There is an affidavit on the record which has been accepted that this sum of Rs. 1,00,000 was sent by the Bhavnagar Mills to the Bombay Mills by a cheque drawn by the Bhavnagar Mills in favour of the Bombay Mills. On these facts the question that arises is whether the assessee has become liable to pay tax on…

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