Law:

Section:

Section 68 of the Income-tax Act, 1961 - Cash credit - Assessment year 1946-47 - ITO having noticed two amounts credited in one R's account in assessee's account books, and same having been invested in gold, yielding profit, treated entire amounts including profit as assessee's income from undisclosed sources and completed reassessment - Tribunal, on basis of material on record upheld taxability of amount of profit, but did not accept said cash credits being taxed as assessee's income from undisclosed sources - Whether, aforesaid finding recorded by Tribunal was finding of fact, and consequently, no question of law arose from Tribunal's order - Held, yes FACTS In the year of account relevant to the assessment year 1946-47, two amounts were found credited in one R's account in the account books of the assessee-company, and these amounts having been invested in gold, eventually yielded profit. The ITO, acting under section 34(1)(a) of 1922 Act brought to tax the said amounts including the amount of profit, in the assessee's hands as its income from undisclosed sources. On second appeal, the Tribunal, after obtaining a remand report from AAC, referred to the relevant facts and evidence on record and held that the amount of profit was assessee's profit, but in relation to the two cash credits, it opined that there was a reasonable probability that this money might belong to one or other of the shareholders and not to the company. It, accordingly, did not confirm the inclusion of the two amounts in the assessee's assessment. On reference : HELD On the basis of all the evidence of facts on record, the Tribunal found it difficult to accept the contention of the revenue that amount in question was income of the assessee-company from undisclosed sources. Having regard to these facts the submission that the finding of the Tribunal was totally on a question of fact was correct. The question was regarding making an inference in favour of the revenue that this money belonged to the assessee-company, because the explanation of the assessee-company in connection with this money was rejected. It was permissible on the basis of the evidence on record for the Tribunal to hold…

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