Judgment 1. In this case the Income-tax Appellate Tribunal has referred the following question of law for the decision of the High Court under Sec. 66 (2) of the Indian Income-tax Act :- - "Whether in the facts and circumstances of the case, the two amounts of Rs. 5,000 and Rs. 20,500 are liable to be taxed by the Income-tax Department as secreted profits by the assessee." 2. The assessee had taken a lease of several forests from the Government and used to sell the timber. For the "assessment year 1945-40 the Income tax Officer found in the course of examination of the account books that there were cash credits to the extent of Rs. 61,000 in the capital account. It appears that on the 12th May 1944, the assessee had pledged gold coins with one Ghanshyamdas Gobardhandas of Banaras for securing a loan of Rs. 20,500. There was another sum of Rs. 5,000 obtained by the assessee on the 3rd November 1944, by pledging a gold necklace with one Nowarttandas Purusottamdas of village Barra. As regards the balance of Rs. 35,500 the case of the assessee was that the amount was raised on the mortgage of the zamindari income. The assessee filed a written explanation before the Income-tax Officer with regard to the source of these cash credits. It was alleged by the assessee that the gold coins used by him for securing the loan of Rs. 20, 500 were received from his wife and there is mention in the partition deed of the year 1912 about the allotment of the gold coins. As regards the amount of Rs. 5,000, the case of the assessee was that this amount was secured by pledging a gold necklace weighing about 60 tolas. This gold necklace belonged to the Chhoti Babu, the wife of Madho Prasad, and the ornament was given to the Chhoti Bahu as mentioned in the partition deed. The Income-tax Officer did not accept the explanation of the assessee and held that the entire amount of Rs. 61,000 should be taxed as the secreted income of the assessee. On appeal the Appellate Assistant Commissioner agreed with the views of the Income-tax Officer and confirmed the order of assessment. The Income-tax Officer did not accept the explanation of the assessee and held that the entire amount of Rs. 61,000 should be taxed as the secreted income of the assessee. On appeal the Appellate Assistant Commissioner agreed with the views of the Income-tax Officer and confirmed the order of assessment. The matter was then taken upon appeal to the Income-tax Appellate Tribunal, and by its order dated the 10th March 1956, the Tribunal set aside the order of the Appellate Assistant Commissioner and remanded the case to him for the purpose of considering certain document produced by the assessee. The Appellate Assistant Commissioner made a detailed inquiry into the matter and found that the batwaranama was a genuine document. The finding of the Appellate Assistant Commissioner is based upon the affidavits sworn by Sri Mukundram, the only member of the panchayat who was alive. It appears that Mukundram was also examined on oath before the Appellate Assistant Commissioner, There was also an affidavit filed by Chandradhar Avasthi, Proprietor of the firm Ghanshyamdas Gobardhandas of Banaras, dated the 2nd June, 1950. The Appellate Assistant Commissioner also noticed that the transaction of pledging was recorded in the rokar bahi of the said Chandradhar Avasthi. With regard to the amount of Rs. 5,000, the Appellate Assistant Commissioner accepted the explanation of the assessee that the amount was borrowed on the pledging of the gold necklace. This transaction is noted in the rokar bahi of the assessee and moreover in the partition deed it is mentioned that a gold hasuli weighing 60 tolas has been allotted to the share of the Chhoti Bahu, namely, the wife o£ Madho Prasad. On these materials the Appellate Assistant Commissioner held that the explanation of the assessee was true and the amount of Rs. 5,000 represented the amount of the loan secured by the assessee on the pledging of the gold ornament. Against the order of the Appellate Assistant Commissioner there was an appeal taken by the Income-tax Department to the Appellate Tribunal. The Appellate Tribunal refused to believe the explanation of the assessee and held that the amount of Rs. 25,500 was liable to be taxed in the hands of the assessee" as secreted profits. The Tribunal, however, accepted the explanation of the assessee with regard to the amount of Rs. The Appellate Tribunal refused to believe the explanation of the assessee and held that the amount of Rs. 25,500 was liable to be taxed in the hands of the assessee" as secreted profits. The Tribunal, however, accepted the explanation of the assessee with regard to the amount of Rs. 35,500 said to have been raised by Madho Prasad by pledging his share of the zamindari income. 3. On behalf of the assessee the argument put forward by Mr. Mazumdar was that Tribunal had not applied its mind to certain important materials in the case before reaching the conclusion that the two amounts of Rs. 20,500 and Rs. 5,000 were secreted profits of the assessee from an undisclosed source and, therefore, were taxable in the hands of the assessee. Learned Counsel pointed out, in the first place, that the Tribunal came to a finding that the panchnama dated the 27th December, 1912, was not a genuine document but was an afterthought. It has been mentioned by the Tribunal in its judgment that "the award was not produced at the time of assessment and no mention of it was made at that time." This observation is unfounded because the record shows that before the Income-tax Officer Madho Prasad, the assessee, definitely stated that there was a panchnama which recorded the allotment of guineas and gold mohurs. Both the Judicial Member and the Accountant Member have not referred to the explanation of the assessee given before the Income-tax Officer. In the second place, there was the important fact that before the Income-tax Officer the assessee prayed for time to produce the receipt of the merchant Ghanshyamdas Gobardhandas, This receipt was actually produced by the assessee before the Appellate Assistant Commissioner after the case was remanded by the Tribunal when the case was heard by it on 10th March 1953. The receipt was accepted as a genuine document by the Appellate Assistant Commissioner. The panchnama was also produced before the Appellate, Assistant Commissioner who took the view that it was a genuine document. It appears that Sri Mukundram gave evidence before the Appellate Assistant Commissioner and also filed an affidavit on 2nd December 1950, consuming that he made the batwara along with the other members of the panch. The panchnama was also produced before the Appellate, Assistant Commissioner who took the view that it was a genuine document. It appears that Sri Mukundram gave evidence before the Appellate Assistant Commissioner and also filed an affidavit on 2nd December 1950, consuming that he made the batwara along with the other members of the panch. The appellate Assistant Commissioner accepted the evidence of Sri Mukundram as genuine and held that the batwara was a very old piece of document and it must be accepted as genuine. The Appellate Tribunal has reversed the finding of the Appellate Assistant Commissioner, holding that the panchnama was not a genuine document, but the Tribunal has made no reference to the affidavit of Sri Mukundram nor to the evidence he gave before the Appellate Assistant Commissioner to the effect that he was present at the partition and that the panchnama was prepared in his presence. It appears that the Appellate Tribunal completely omitted to notice the evidence of Sri Mukundram and also his sworn affidavit. It is also important to notice that the Tribunal has not referred to the important fact that Chandradhar Avasthi had given a receipt with regard to the pledging of the gold coins and taking by the assessee of the loan of Rs. 20,500/-. The receipt is on the printed letter-pad of the firm, and the appellate Assistant Commissioner also noted that the transaction had been recorded in the rokar bahi of Ghanshyamdas Gobardhandas. The Appellate Tribunal has not referred to this important circumstance at all and no reason has been given by the Tribnnal why the receipt of Chandradhar Avasthi should be discarded. No reason has also been given by the Tribunal why the sworn statement of Sri Mukundram should be rejected on the question of the partition which took place on 27th December 1912. It is true that the Tribunal has stated that no share was allotted to the mother of Madho Prasad, and the view of the Tribunal is that in these circumstances the punchnama could not be a genuine document. But it does not appear from the order of the Income-tax Officer or the Appellate Assistant Commissioner or any part of the record of the case that there was an admission by the assessee that the mother was alive at the time of the alleged partition. But it does not appear from the order of the Income-tax Officer or the Appellate Assistant Commissioner or any part of the record of the case that there was an admission by the assessee that the mother was alive at the time of the alleged partition. On the contrary, the panchnama itself recites that the mother was dead before partition and, the mother had given her gold and silver ornaments, and gold coins to her two daughter-in-laws. It is obvious that the Tribunal has completely failed to notice that in the panchnama itself there is a reference to the death of the mother of Madho Prasad. 4. With regard to the amount of Rs. 5,000/-also, the finding of the Tribunal is vitiated because the Tribunal has not taken into account two important circumstances in favour of the assessee. In the first place, the loan of Rs. 5,000.00 has been noted in the rokar bahi of the assessee. No reference is made to this fact by the Appellate Tribunal. There is no reason given why the rokar bahi of the assessee should be disbelieved on this point. There is also the fact that the list of ornaments given to Chhoti Bahu in the partition deed does state that a gold basuli weighing 60 tolas was given to her. The Appellate Assistant Commissioner accepted the entry in the rokar bahi of the assessee as genuine and held that the source of the amount of Rs. 5,000/-had been proved and there was no reason to include the amount of Rs. 5,000.00 in the taxable income of the assessee. The Appellate Tribunal has reversed this finding of the Appellate Assistant Commissioner without referring to the important reasons given by the Appellate Assistant Commissioner for his inference. In our opinion, the finding of the Appellate Tribunal with regard to both the amounts of Rs. 20,500 and Rs. 5,000 is purely speculative and based upon surmises or mere suspicion and is hot Supported by any material. It is true that the question at issue in this case is. essentially a question of fact, but it is well established that if the Tribunal decides a question of fact without any material at all, or if the Tribunal takes a view of facts which cannot be reasonably entertained, the High Court has jurisdiction to interfere. It is true that the question at issue in this case is. essentially a question of fact, but it is well established that if the Tribunal decides a question of fact without any material at all, or if the Tribunal takes a view of facts which cannot be reasonably entertained, the High Court has jurisdiction to interfere. In our opinion, there is no material in this case to support the finding of the Appellate Tribunal that the two amounts of Rs. 20,500 and Rs. 5,000 were the secreted profits of the asses-see liable to be taxed by the Income-tax Department as secreted profits of the assessee. In our opinion the present case falls within the principle of decision of a Bench of this Court in Bhimraj Bansidhar V/s. Commr. of Income-tax, Bihar and Orissa 1954-26 I. T. R. 185 : ((S) 1955 Pat 172) (A) where a finding of the Appellate Tribunal on a question of fact was set aside by the High Court on the ground that there was no material to support the finding- The principle has been clearly put by the House of Lords in a recent English case, Edwards (Inspector of Taxes) V/s. Bairstow 1955-28 I. T. R 579 (B). In that case the question at issue was whether a particular transaction was an advantage in the nature of trade and it was found by the General Commissioners that upon the facts presented before them there was no adventure in the nature of trade to justify an assessment to income-tax under Case I of Schedule D to the Income-tax Act 1918. This finding of the General Commissioners was set aside by the House of Lords. It was observed by Viscount Simonds in the course of his speech that the finding that the transaction was not an adventure in the nature of trade was no doubt an inference of fact, but that inference could be set aside because it appeared that the Commissioners had acted without any evidence or upon a view of facts which could not reasonably be entertained. At pp. At pp. 585-86 Viscount Simonds states :- - "I would make it clear that in my opinion, whatever test is adopted, that is whether the finding that the transaction was not as adventure in the nature of trade is to be regarded as a pure finding of fact or as the determination of a question of law or of mixed law and fact, the same result is reached in this case. The determination cannot stand, this appeal must be allowed and the assessment must be confirmed. For it is universally conceded that, though it is a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think, fairly summarised by saying that the Court should take that course if it appears that the Commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained." The same view has been expressed by Lord Radcliffe. In the course of his speech on pp. 590-91 of the report Lord Radcliffe states :- - " For example, in Cooper V/s. Stubbs, (1925) 133 L. T. 582 (c), Rowlatt J. was prepared to overrule the Commissioners, determination that no trade existed because, as he said : If one were trying a question of this sort with a jury; one would have to say upon these facts, well, now a trade is proved, and I think that what the Commissioners have done is merely to give the wrong name to a state of facts which in law amount to something else. In the Court of Appeal the majority did not agree with him, holding, in effect, that it would not ha,ve been right to give such a direction to the jury on the facts as found. We are not rehearing the case of (1925) 2 K.B. 753 (C) though one can say, at any rate sed victa Catodi. But I see no reason to think that the majority were following any different principle. Warrington L. J. said that intervention was proper only, in a very clear case, where either the Commissioners have come to their conclusion, without evidence which should support it, that is to say, have come to a conclusion which on the evidence no reasonable person could arrive at, or have misdirected themselves in point of law. Warrington L. J. said that intervention was proper only, in a very clear case, where either the Commissioners have come to their conclusion, without evidence which should support it, that is to say, have come to a conclusion which on the evidence no reasonable person could arrive at, or have misdirected themselves in point of law. And Atkin L, J. recognised that there may be a state of facts which can only lead to one conclusion of law. Now if I turn to the Scottish decisions I find that the judges are stating, though sometimes in somewhat different words the same principle. Lord Kormands judgment in the First Division of the Court of Session in Inland Revenue Commrs. V/s. Fraser, 1942 S G 493 (D), has said almost everything that needs to be said on this branch of the subject. In cases, he says, where it is competent for a tribunal to make findings in fact which are excluded from review the Appeal Court has always jurisdiction to intervene i£ it appears either that the tribunal has misunderstood the statutory language--because a proper construction of the statutory language is a matter of law--or that the tribunal has made a finding for which there is no evidence or which is inconsistent with the evidence and contradictory of it. And that, in its turn, appears to me to propound the same principle as that adopted by Lord Cooper in Inland Revenue Commrs. V/s. Toll Property Co. Ltd., 1952 S C 387 (E), where he says: keeping in view the nature of the transaction, the purpose with which the Company was floated and the objects which were prescribed in the memorandum of association and the whole of the other circumstances which I have briefly summarised, it seems to me that the majority of the Commissioners were not entitled to reach the conclusion which they did, that they must have misdirected themselves in law, and that the true and only reasonable conclusion on the facts found is the conclusion reached by the dissenting Commissioner." Later on, in the course of his speech, Lord Radcliffe said : "When the case comes before the Court it is its duty to examine the determination having regard to its knowledge of the relevant law. If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law. But without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have coma to the determination under appeal. In those circumstances, too the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been error in point of law. I do not think that it much matters whether this state of affairs is described as one in which there is no evidence to support the determination or as one in which the evidence is inconsistent with and contradictory of the determination, or as one in which the true and only reasonable conclusion contradicts the determination. Rightly understood, each phrase propounds the same test. For my part, I prefer the last of the three, since I think that it is rather misleading to speak of there being no evidence to support a conclusion when in cases such as these many of the facts are likely to be neutral in themselves, and only to take their colour from the combination of circumstances in which they are found to occur." 5. This principle has also been affirmed by the Supreme Court in a recent caae, Sree Minakshi Mills Ltd. V/s. Commr. of Income-tax, Madras, 1957-31 ITR 28: ((S) AIR 1957 SC 49 ) (F), in which Venkatarama Ayyar J. observed that a finding of the Appellate Tribunal on a question of pure fact is liable to be disturbed by the High Court on a reference if there is no evidence to support the finding of fact be if it is perverse. 6. For the reasons we have expressed we hold that the finding of the. Appellate Tribunal in this case with regard to the two amounts of Rs. 20,500/-and Rs. 5,000.00 is not supported by any material and is also a perverse finding of fact andt therefore, the question at issue has passed from the region of fact into the region of law and the High Court has jurisdiction to interfere with the finding of the Appellate Tribunal in the present case. 20,500/-and Rs. 5,000.00 is not supported by any material and is also a perverse finding of fact andt therefore, the question at issue has passed from the region of fact into the region of law and the High Court has jurisdiction to interfere with the finding of the Appellate Tribunal in the present case. We are of opinion, therefore, that in the facts and circumstances of the case, the two amounts, Rs. 20,500.00 and Rs. 5,000/-, are not liable to be taxed by the Income-tax Department as secreted profits of the assessee. It follows that the question of law referred to the High Court by the Appellate Tribunal must be answered in favour of the assessee and against the Income-tax Department. The assessee is entitled to the costs of this reference. Hearing fee Rs. 250/-.