N.M. KASLIWAL, J.—The above five applications under section 256 (2) of the Income-tax Act, 1961 (hereinafter referred to as the Act) are being disposed of by one common order as common questions of fact and law are involved in all the above five cases except that they relate to five different assessment years i.e. 1965-66, 1966-67, 1967-68, 1969-70 and 1970-71. 2. We shall only mention the facts relevant for the purpose of disposal of these applications. 3. M/s. Golcha Properties (P) Ltd. (In Liquidation) (hereinafter referred to as the Assesssee) went into creditors voluntary liquidation on 4th July, 1966 and during the pendency of the winding up proceedings is being looked alter by the Official Liquidator wiih effect from 10th May, .968. The assessee entered into certain contracts with M/s Dhartidhan Pvt. Ltd.. and M/s Madan Bombay whereby it gave rights to exhibit films at Golcha Cinema Delhi and Maratha Mandir at Bombay in exchange of fixed weekly rentals. The Cinema at Bombay was let out on a weekly rent of Rs. 13000/- and Cinema at Delhi was let out for Rs. 11,000/- to M/s. Madans Bombay and on weekly rental of Rs. 9,300/- to M/s. Dhartidhan Pvt. Ltd. The Income-tax Officer Central Circle I, Jaipur, held that the above contracts were not genuine and both Dhartidhan and Mad-ans were contractors created on paper by the assessee, otherwise none of them had any role to play as contractois and cinemas in fact were managed and run by the assessee itself and the profits flowing from the exhibition of films at these two cinemas rightly belongs to the assessee. Aggrieved against the order of the Income-tax Officer, the assessee want in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner also came to the conclusion that these contracts were not genuine business contracts. On a further appeal by the Assessee the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, by its order dated 29th June, 1976, while dealing with the assessment year 1965-66, upheld the contention of the assessee and came to the conclusion that on the basis of the evidence on record the department had not been able to make out the case that the contracts in question did not bring into existence, the real relationship as contemplated by them and that the said relationship has not been maintained all along by the two sides. It further held that the income of the two concerns had not flown back to the assessee company and in fact there was hardly any evidence on the basis of which it may be held that the contracts were Benami. The Tribunal thus held that the clubbing of the income in the circumstances appeared to be totally unjustified and deleted the additions made on this account in the income of the assessee. The detailed reasons were given by the Tribunal in its order dated 29th June, 1979 while dealing with the matter of the assessment year 1965-66, and for subsequent years of assessment, the Tribunal followed this order. The Commissioner of Income-tax Rajasthan Jaipur submitted an application under section 256 (1) of the Act for making a reference of the following question to Honble the High Court: "Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the contracts of the assessee company with M/s. Dhartidhan Pvt. Ltd and M/s. Madans Bombay for leasing out exhibition rights of the two Cinema houses belonging to the assessee were real and genuine and income arising therefrom did not belong to the Assessee Company?" 4. The Tribunal took the view that the above question was a pure question of fact and as such did not see any ground to make a reference to the Honble High Court and dismissed the application. In view of the above circumstances the Revenue has submitted the present applications under section 256 (2) of the Act praying that the Income-tax Appellate Tribunal be directed to state the case and refer the following questions of law to this court arising out of the Tribunals order: (1)—Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the contracts of the assessee Company with M/s. Dharti Dhan (P) Ltd. Bombay and M/s. Madans Bombay for leasing out of exhibition rights of the two Cinema-houses belonging to the assessee were real and genuine and income arising there from did not belong to the assessee Company? (2)—Whether the finding arrived at by the Appellate Tribunal is vitiated because of the non- consideration of the meterial evidence on record and the finding is inconsistent with the evidence on record and the Tribunal has given the finding upon its own imagination ?" 5. (2)—Whether the finding arrived at by the Appellate Tribunal is vitiated because of the non- consideration of the meterial evidence on record and the finding is inconsistent with the evidence on record and the Tribunal has given the finding upon its own imagination ?" 5. As regards the question No. 2 mentioned above Mr. Ranka, learned counsel for the assessee, raised an objection that this question was not formulated in the application under section 256(1) of the Act submitted before the Tribunal and as such it cannot be called for under sec. 256(2) of the Act. It is submitted that while dealing with a reference application the High Court is bound to accept the findings of fact arrived at by the Appellate Tribunal and if a person, who wants to challenge such findings, he must do so by first moving an application under section 256(1) and if he has failed to file an application under section 256(1) expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for one reason or another. It is submitted that in a reference under section 256 the High Court exercises advisory jurisdiction and does not function as a court of appeal. If a party accepted the Tribunals conclusion on a question or in any event did not apply under sub-section (1) of Section 256 to the Tribunal to refer that particular question to the court and consequently there has been no refusal by the Tribunal to refer that question, the High Court cannot raise and decide that question nor can it issue a direction to the Tribunal under sub-section (2) to state and refer a case upon that question. Reliance in this connection is placed on Commissioner of Income-tax Bombay vs. Scindia Steam Navigation Co. Ltd. (2); Commissioner of Income-tax vs. Smt. Ansuya Devi (3); Lakshmiratan Cotton Mills Co. Ltd. vs. Commissioner of Income-tax U.P. (4) and Commissioner of Income-tax vs. Kotrika Venkataswamy: And Sons (5). 6. Mr. Mehta learned counsel for the Revenue, could not cite any authority taking a contrary view. Ltd. (2); Commissioner of Income-tax vs. Smt. Ansuya Devi (3); Lakshmiratan Cotton Mills Co. Ltd. vs. Commissioner of Income-tax U.P. (4) and Commissioner of Income-tax vs. Kotrika Venkataswamy: And Sons (5). 6. Mr. Mehta learned counsel for the Revenue, could not cite any authority taking a contrary view. In view of the above circumstances we hold that as question No. 2 stated above was not mentioned in the application submitted under sub-section (1) of section 256 of the Act and consequently there has been no refusal by the Tribunal to refer that question, we cannot issue a direction to the Tribunal under sub-section (2) to state and refer a case upon that question. The application, therefore, as regards question No. 2 are dismissed. 7. On question No. 1 Mr. Mehta, learned counsel for the Revenue has contended that the Income-tax Officer had given detailed reasons to hold that the contracts entered into between the Assessee and M/s. Dhartidhan Pvt. Ltd., and M/S. Madans Bombay were not genuine transactions and were made merely in order to evade taxation, but the learned Tribunal set aside these findings without substantial reason and over-looked the material evidence placed on record in this regard. The question whether certain contracts were genuine or not may be initial question of fact. But whether there was evidence or material to prove that such contracts were genuine was a question of law. It is submitted that the Tribunal committed a clear error in deciding the matter on an abstract burden of proof and in taking the view that the Department had failed to prove by any positive evidence to make out a case of Benami. It is submitted that in the facts and circumstances of this case the Department could not have led any positive evidence to prove that the contracts were not genuine or were Benami. The Department was entitled to prove from the attending facts and circumstances that these contracts were not genuine and in the present case there were several circumstances admittedly proved on record from which there was no other conclusion, than to hold that these contracts were not genuine. The Department was entitled to prove from the attending facts and circumstances that these contracts were not genuine and in the present case there were several circumstances admittedly proved on record from which there was no other conclusion, than to hold that these contracts were not genuine. The Income-tax Officer and the Appellate Assistant Commissioner in their respective orders had clearly brought out such circumstances and the Tribunal failed to make a mention of these circumstances and as such the Tribunal committed an error of law and a question of law arises out of the Tribunals order. Reliance is placed on the following observations in Dr. Sardar Bahadur Sir Sunder Singh Gojithia vs. Commissioner of Income-tax United and Central Provinces (1); "When a document purporting to be an instrument of partnership is tendered under S. 26A on behalf of a firm and application is made for registration of the firm as constituted under such instrument, a question may arise whether the instrument is intended by the parties to have real effect as governing their rights and liabilities inter-se in relation to the business or whether it has been executed by way of the pretance in order to escape liability for tax and without intention that its provisions should in truth have effect as defining the rights of the parties as between themselves. To decide that an instrument is in this sense not genuine is to come to a finding of fact: whether there was evidence upon which it was open to the Income-tax authority to come to such a decision in a question of law." 8. To decide that an instrument is in this sense not genuine is to come to a finding of fact: whether there was evidence upon which it was open to the Income-tax authority to come to such a decision in a question of law." 8. Reliance is placed on Krishna Flour Mills vs. Commissioner of Income tax Banglore: (6) in which their Lordships of the Supreme Court were considering an application moved under section 66 (2) of the Income Tax Act, 1922, before the High Court for directing the Tribunal to state a case on the following question of law: "Whether on the facts and in the circumstances of the case the decision of the Tribunal that the firm is not a genuine and no registerable under Sec. 26A of the Indian Income-tax Act is right in law?" The Honble Supreme Court granted a special leave and held that a question of law arose out of the order of Tribunal, namely: "Whether in the facts and circumstances found by the Tribunal there was material to come to the conclusion that the partnership firm constituted by the Deed of partnership dated November 16, 1949, was not genuine?" The order of the High Court was set aside and the Tribunal was required to state a case on the question indicated above. 9. In Venkateswara District Motor Service vs. Commissioner of Income-tax, Mysore (7) a Bench of the Mysore High Court observed as under: "It is clear from a long line of decisions both of the Privy Council and of the Supreme Court that when a question arises whether a partnership whose registration is sought is a genuine partnership, although a finding that it is not a genuine partnership is finding on a question of fact, the question whether there was material on which it was possible to reach that conclusion is however a question of law. That was the elucidation made in Sunder Singhs case. While in Jiyajeerao Cotton Mills Ltd. vs. Commissioner of Income-tax it was explained that if there was no evidence to sustain the finding recorded by the Tribunal or if its finding in a perverce finding, the finding would be open to investigation in appeal, in Krishna Flour Mills vs. Commissioner of Income-tax the enunciation made was that a question of bogus partnership is unreasonable and justified either by partnership law or common human experience. That a similar consequence ensues when the conclusion is influenced by the application of wrong principles is what appears from Champaran Cane Concern vs. State of Bihar." 10. In V. D. Dhanwatey vs. Commissioner of Income-tax, Madhya Pradesh (8) their Lordships of the Supreme Court held as under : "It was finally contended on behalf of the appellant that the Appellate Tribunal had found that Shri V.D Dhanwatey had earned the remuneration without any detriment to the family funds and the finding of the Appellate Tribunal on this point was at finding on a question of pure fact and the High Court could not, in a reference urider section 66 (1) of the Income-tax Act, 1922, question the correctness or the validity of that finding. We are unable to accept the argument put forward on behalf of the appellant. It is true that the jurisdiction conferred on the High Court by section 66(1) of the Income-tax Act is limited to entertaining references on questions of law. In the present case, however, the conclusion reached by the Tribunal is not a conclusion on a question of pure fact but it is a conclusion on a mixed ques-tion of law and fact. In other words, though the conclusion of the Tribunal is no doubt based upon primary evidentiary facts, its ultimate form is determined by the application of the relevant legal principles of Hindu Law which has been discussed in the course of this judgment. In dealing with findings on questions of mixed law and fact the High Court muse no doubt accept the findings of the Tribunal on the primary questions of fact; but it is open to the High Court to examine whether the Tribunal had applied the relevant legal principles correctly or not in reaching its final conclusion: and in that sense, the scope of inquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure points of law. For example, in G. Venkataswami Naidu & Co. For example, in G. Venkataswami Naidu & Co. vs. Commissioner of Income tax it was pointed out by this Court that where the question is whether a transaction is in the nature of trade, even if the conclusion of the Tribunal about the character of the transaction is treated as a conclusion on a question of fact, in arriving at its final conclusion on facts proved, the Tribunal has necessarily to address itself to the legal requirements associated with the concept of trade or business. The final conclusion of the Tribunal can, therefore, be challenged on the ground that the relevant legal principles have been misapplied by the Tribunal in reaching its decision on the point; and such a challenge is open under section 66(1) because it is a challenge on a ground of law." 11. In G. Venkataswami Naidu & Co. vs. Commissioner of Income-tax: (9) their Lordships of the Supreme Court observed as under: "Before we refer to the said decision it may be relevant to observe that there are two ways in which the question may be approached. Even if the conclusion of the tribunal about the character of the transaction is treated as a conclusion on a question of fact, it cannot be ignored that, in arriving at its final conclusion of facts proved, the tribunal has undoubtedly to address itself to the legal requirements associated with the concept of trade or business. Without taking into account such relevant legal principles it would not be possible to decide whether the transaction in question is or is not in the nature of trade. If that be so, the final conclusion of the tribunal can be challenged on the ground that the relevant legal principles have been misapplied by the tribunal in reaching its decision on the point, and such a challenge would be open under S. 66(1) because it is a challenge on a ground of law. The same result is achieved from another point of view and that is to treat the final conclusion as one on a mixed question of law and fact. On this view the conclusion is not treated as one on a pure question of fact, and its validity is allowed to be impeached on the ground that it has been based on a misapplication of the true legal principles. On this view the conclusion is not treated as one on a pure question of fact, and its validity is allowed to be impeached on the ground that it has been based on a misapplication of the true legal principles. It would thus be seen that whether we call the conclusion in question as one of fact or as one on a question of mixed law and fact, the application of legal principles which is an essential part in the process of reaching the said conclusion is undoubtedly a matter of law and if there has been an error in the application of the said principles it can be challenged as an error of law. The difference then is merely one of form and not substance: and on the whole it is more convenient to describe the question involved as a mixed question of law and fact. That is the view expressed by this Court in the case of Meenakshi Mills, Madurai, 1956 SCR 691 : ((5) AIR 1957 SC 49 ); and in our opinion, it evoids any conclusion of thought and simplifies the position by treating such questions as analogous to those falling under the category of questions of law." 12. In Omar Salay Mohammed Sait vs. Commissioner of Income-tax Madras: (10) their Lordships of the Supreme Court held that: "We are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this Court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circums-stances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circums-stances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises nor should it act on no evidence and partly on suspicions, conjectures and surmises and if it does not anything of the sort, its findings even though on questions of fact will be liable to be set aside by this Court." 13. Reliance is also placed on the following observations of their Lordships of Supreme Court in Commissioner of Income-tax West Bengal II vs. Rajasthan Mines Calcutta (11): "It was Urged on behalf of the Revenue that the finding of the tribunal that the purchase and sale of lands were made in the course of business being a finding of fact, it was not open to the High Court to interfere with that finding. But as observed by this Court in G. Venkataswamy Naidu and Co. vs. Commissioner of Income-tax:35 ITR 594= ( AIR 1959 SC 359 ) if the finding of fact is heard on an inference from the primary evidentiary facts proved in the case, its correctness or validity is open to challenge in reference proceedings within narrow limits. It is open to the parties to challenge a conclusion of fact drawn by the tribunal on the ground that it is not supported by any legal evidence or that the impugned conclusion drawn from the relevant facts is not rationally possible. If such a plea is established, the Court has to consider whether the conclusion in question is not perverse and should not. therefore, be set aside. On the facts of this case the High Court was justified in examining the correctness of the inference drawn by the Tribunal on the basis of the primary facts found by that Tribunal." 14. On the other hand, Mr. Ranka, learned counsel for assessee streneo-usly contended that the burden of proof to prove that the transaction is a ben-ami or sham or unreal or not genuine is on the department. On the other hand, Mr. Ranka, learned counsel for assessee streneo-usly contended that the burden of proof to prove that the transaction is a ben-ami or sham or unreal or not genuine is on the department. The finding recorded by the appellate Tribunal on the point whether a contract was made benami or net is one of fact and even if such finding is based upon some evidence it will have to be accepted by the High Court in a reference. The High Court cannot go into the question of sufficiency of evidence. Thus the inference from the facts of this case by the Tribunal that the transaction could not be proved to be Benami by the department did not involve any question of law and this being purely a question of fact there was no occasion for calling any reference. It is submitted that the Tribunal had considered the antire facts and circumstances brought out by the Income-tax Officer and the Appellate Assistant Commissioner and have given elaborate reasons for not accepting the reasons advanced by these authorities and has not committed any error of law in placing the burden of proof on the department. According to the learned counsel it was not disputed even by the Income-tax Officer that M/s. Dhartidhan (P) Ltd., and M/s. Madans Bombay had their independent existance and were having in-fact from various sources including the income from the contract taken for exhibiting the films in the Cinemas of the Assessee Company. The execution of the agreement in pursuance to the contracts is also not disputed. It is also proved on record that the income which accrues from the exhibition of the films was never flown back to the assessee company and remained in the above mentioned two concerns. There was nothing abnormal in the agreement to show that they were not genuine and even if for arguments sake it may be admitted that certain favours were shown by the assessee company, it could not ipso facto go to show that the contracts in question were shame or not genuine. The learned Tribunal considered all the above aspects and did not commit any mistake of fact or law in holding that the clubbing of the income in the circumstances in the income of assessee was totally unjustified. The learned Tribunal considered all the above aspects and did not commit any mistake of fact or law in holding that the clubbing of the income in the circumstances in the income of assessee was totally unjustified. Reliance is placed on Karnani Properities Ltd., vs. Commissioner of Income-tax, West Bengal (12) in which it was held that. "When the question referred to the High Court speaks of "on the facts and in the circumstances of the case", it means on the facts and circumstances found by the Tribunal and not facts and circumstances that may be found by the High Court on a reappraisal of the evidence. In the absence of a question whether the findings were vitiated for any reason being before the High Court, the High Court has no jurisdiction to go behind the statements of fact made by the Tribunal." 15. In Commissioner of Income-tax (Central), Calcutta vs. Daulat Ram Rawatmull (13) it was observed as under: "That the onus of proving that the apparent was not the real was on the party who claimed it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent-firm even though the receipt had been issued in the name of B, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B."..................... Findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was not evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come; and this is so even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribunal. In other words, such a finding can be reviewed only on the ground that there is no evidence to support it or that it is perverse. Further, when a conclusion has been reached on an appreciation of a number of facts, whether that is sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole." 16. Further, when a conclusion has been reached on an appreciation of a number of facts, whether that is sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole." 16. Reliance is also placed on Rai Bahadur Mohan Singh Dharoi vs. Commissioner of Income-tax, West Bangal (14) in which it was observed as under: "A finding recorded by the Appellate Tribunal on the point whether a purchase was made benami or not is one of fact. Such a finding based upon some evidence would have to be accepted by the High Court in a reference under section 66(1) of the Income-tax Act, 1922." 17. In Jaydayal Poddar (Deceased) through LRs. vs. Mst. Bibi Hazra(15) in which it was observed as follows : "It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned and not unoften such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him nor justify the acceptance of mere con-jectures or surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation, and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. The reason is that a deed is a solemn document prepared and executed after considerable deliberation, and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. Though the question, whether a particular sale is benami or not,is largely one of fact, and for determining the question, no absoluta formulas or acid test, uniformally applicable in all situations, can be laid down; yet in weighing the probabilities and for fathering the relev-ent indicia, the courts are usually guided by these circumstances: (1) the source from which the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar; (5) the custody of the title-deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Nevertheless No. 1 viz the source whence the purchase money came, is by far the most important test for determining whether the sale standing in the name of one person, is in reality for the benefit of another." 18. It is further submitted that the findings of fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal or the finding was perverse which no reasonable man could have arrived at. The High Court will not interfere even though it would have come to a different conclusion from that of the Tribunal on the appreciation of the evidence. The High Court will not interfere even though it would have come to a different conclusion from that of the Tribunal on the appreciation of the evidence. Reliance in this connection is placed on the following observations in Commissioner of Income-tax (Central) Calcutta vs. Daulat Ram Rawatmull (supra): "Findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal upon which they, as reasonable man, could come to the conclusion to which they have come; and this is so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribunal..................... The onus to prove that the apparent is not the real, is on the party who claims it to be so. As it was the department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of Biswanath, the burden lay on the department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of Biswanath. A simple way of discharging the onus and resolving the controversy was to trace the source and origin of the amount and find out its ultimate destination. So far as the source is concerned, there is no material on the record to show that the amount came from the coffers of the respondent firm or that it was tendered in Burrabazar Calcutta Branch of the Central bank on November 15, 1944, on behalf of the respondent. As regards the destination of the amount, it has already been mentioned that there is nothing to show that it went to the coffers of the respondent. On the contrary, there is positive evidence that the amount was received by Biswanath on January 27, 1946. It would thus follow that both as regards the source as well as the destination of the amount, the material on the record gives no support to the claim of the department." 19. Reliance is also placed on the fallowing observations in a case recently decided by a Bench of this Court in Commissioner of Income-tax vs. Sah Swaroop Narain (16). Reliance is also placed on the fallowing observations in a case recently decided by a Bench of this Court in Commissioner of Income-tax vs. Sah Swaroop Narain (16). "We have carefully scrutinized the appellate order of the Tribunal and find that the Tribunal was very much alive to the explanation to section 271 (l)(c) of the Act. It has observed that the explanation no doubt provides for a presumption against the assessee but it is a rebuttable presumption. The preposition of law, as stated by the Tribunal, regarding the interpretation of the explanation, is correct and has not been disputed before us. The Tribunal has then observed that it would depend on the facts and circumstances of each case whether the presumption has been rebutted The Tribunal has also observed that the entire circumstances have to be taken into consideration for deciding the question of imposition of penalty. Having said so, the Tribunal has proceeded to examine the facts of the case and has observed that the explanation regarding the entry in question given by the assessee is supported by the two witnesses produced by him,namely, the depositor and the broker, through whom the deposit had been made. It has held this evidence to be sufficient to rebut the presumption raised against the assessee. The Tribunal has also observed that the evidence recorded in the assessment proceedings and the findings thereon, may also be taken into consideration. There also, the Tribunal has not fallen into any error. Thus, after having taken into consideration the evidence produced by the assessee and the entirety of circumstances, it has come to the conclusion that in absence of positive evidence from the side of the Revenue that the amount of Rs. 17,000/- was derived from an undisclosed source, no penalty can be imposed It is sufficient to point out that the finding of fact arrived at by the Tribunal, after correct application of the principles of law, cannot give rise to a substential question of law, for which reference may be called. To believe or not to believe certain evidence, was perfectly within the jurisdiction of the Tribunal." 20. We have given careful consideration to the arguments advanced by learned counsel for both the parties. We have no hesitation in accepting the contention of Mr. To believe or not to believe certain evidence, was perfectly within the jurisdiction of the Tribunal." 20. We have given careful consideration to the arguments advanced by learned counsel for both the parties. We have no hesitation in accepting the contention of Mr. Ranka, learned counsel for the assessee, that the onus of establishing that a transaction is Benami is on the person as certing that the apparent purchaser is not the real owner and that a finding of fact arrived at by the Tribunal is binding on the High Court in a reference application. It is also true that this Court cannot go into the question of sufficiency or insufficiency of the evidence. It is also correct that the meaning of the words "on the facts and in the circumstances of the case" means, on the facts and circumstances found by the appellate Tribunal and not facts and circumstances that may be found by the High Court on a perusal of the evidence. However, the question involved in the case before us is not in respect of a transaction of the nature of Benami. How the question involved is whether the contracts made by the assessee company with M/s. Dhartidhan (P) Ltd., and M/s. Madans Bombay, were really genuine or not, or were made merely in order to evade taxation. Thus in order to determine the true nature of transactions as observed in Dr S. Bahadur Singhs case (supra) by their Lordships of the Privy Council that to decide that an instrument is in this sense not genuine has to come to a finding of fact but whether there was evidence upon which it was open to the Income-tax Authority to come to such a decision is a question of law. The finding of fact based on an inference from the primary evidence in the facts proved in the case is open to challenge in reference proceedings, if the couclusion drawn from the relevant facts are not rationally possible. As observed in head note (a) in G. Venkataswamy Naidus case (supra) the legal effect of the facts found where the point for determmation is a mixed question of law and fact, is a question of law under section 66(1) of the Income-tax Act. 1922. As observed in head note (a) in G. Venkataswamy Naidus case (supra) the legal effect of the facts found where the point for determmation is a mixed question of law and fact, is a question of law under section 66(1) of the Income-tax Act. 1922. In the present case the Income-tax Officer while considering the question whether Dhartidhan (P) Ltd., and Madans Bombay acted in a manner as genuine contractors would act, took into consideration the following circumstances for holding that the contracts were not genuine, for which the Income- tax officer had given detailed reasons but we would mention those circumstances only in short:— (1)—Both the above concerns were not solvent concerned and were running into losses from year to year. (2)—The distributors share in the film was not made a charge on the exhibition account maintained for Dhartidhan. By not doing so the assessee company exposed itself to a very great risk and that too without admission therein be that sound security from Dhartidhan. (3)—Copies of the agreements for films screened at both the Cinemas were not made available-to the Income-tax Officer on the ground that the same were not traceable. Thus the Income-tax Officer observed that it was not possible for him to judge as to whose initiative the films were booked for the two Cinemas of the Company. Past record, also showed that these films were always Rooked by the assessee company itself. (4)—From Assessees own books of account it was proved that the assessee company had been booking pictures and dealing with the distributors in a manner suggestive of complete non-exercise of its so called contractors. (5)—At Golcha Cinema Delhi the picture Sanjh-Savera was booked by the assessee company and it was the assessee which had made advances of Rs. 60,000/- to Pandav Pictures, who were the distributors of this picture. (6)—Agreement for release of the picture Rajkumar was entered into by the assessee company on making an advance of Rs. 1,10,000/-. If Madans were genuine contractors this advance of Rs. 1,10,000/-should have been made by Madans and not by the assessee. 60,000/- to Pandav Pictures, who were the distributors of this picture. (6)—Agreement for release of the picture Rajkumar was entered into by the assessee company on making an advance of Rs. 1,10,000/-. If Madans were genuine contractors this advance of Rs. 1,10,000/-should have been made by Madans and not by the assessee. (7)—The Picture Pyar Kiya to Darna Kya was run against the wishes of Pandav Pictures at Golcha Cinema Delhi beyond 4th week and it was the assessee company which had been dealing with Pandav Pictures as there was no account of Dhartidhan in the books of Pandav Pictures qua their pictures run at Golcha Cinema Delhi. Then it was the assessee company which had made advance of Rs. 30,000/- for the picture Pyar Kiya To Darna Kya of Pandav Pictures in 1963-64. (8)—The agreement dated 1st December, 1964 between the assessee and Pandav Pictures whereby the account between parties was understood leaves no one to any doubt that it was the assessee company which had been making advances for bookings of pictures to distributors, defacto running pictures and dealing with the distributors. (9)—All the share holders of Dhartidhan (P) Ltd., were directors of the assessee company. Dhartidhan was running in loss and the main idea behind creating them as contracts was to divert the profits of the company so as to evade taxation. Madans was the proprietory concern of late Smt. Madan kanwar, an old lady and mother of Shri Mehtab Chand Golcha and grand mother of Shri H.C. Golcha. Her case was also that of chronic loss. So it was again with a view to divert the profits of the assessee company to a loosing concern that Madans were created as contractor. (10)—The affairs of Madans were looked after by one Shri Mehta Chartered Accountant who was paid not by Madans but by another company under the management of Shri M.C. Golcha and Shri H.C. Golcha. (11)—The publicity was undertaken by the assessee company and that the contractor was not properly debited with the expenditure incurred on account of publicity which proved that the letting out contracts were not meant to be acted upon in reality. 21. (11)—The publicity was undertaken by the assessee company and that the contractor was not properly debited with the expenditure incurred on account of publicity which proved that the letting out contracts were not meant to be acted upon in reality. 21. Looking to all the above facts and circumstances of the case the Income-tax Officer arrived at the conclusion that both Dhartidhan and Madans were contractor created due to favour by the assessee, otherwise none of them had any role to play as contractors and Cinemas were in fact managed and run by the assessee company itself and the profits flowing from the exhibition of films at these two theatres rightly belong to the assessee. The Appellate Tribunal did not take into consideration all the above facts and circumstances pointed out by the Income-tax Officer while holding the contracts to be not genuine but laid great emphasis on the fact that it was the department which was alleging that the income of the two contracts from the exhibition of the films in Cinema of the assessee company belonged to the assessee and when the department made such a positive averment it was apparently for the department to substantiate and prove its averment. The Tribunal further held that the case of Benamiship could not be made out merely on the basis of certain inference and presumptions and there must be some positive evidence to show that the income of the contractors was in fact, the income of the assessee. It has observed that as there was nothing on the record to prove that there was no evidence in the present case on the basis of which it could be held that the transactions were Benami. In arriving at this conclusion in our view the Tribunal took a wrong approach. The Tribunal was wrong in t king the view that in such cases the department has to bring some positive evidence. On the basis of primary facts proved on record, the Tribunal should have arrived at a finding whether the transactions . were genuine or not In this view of the matter when the Tribunal has committed an error in taking a wrong approach of the case and in holding that the Department must prove by positive evidence the case of benamiship and ignored the primary facts proved on record. were genuine or not In this view of the matter when the Tribunal has committed an error in taking a wrong approach of the case and in holding that the Department must prove by positive evidence the case of benamiship and ignored the primary facts proved on record. In other words the Tribunal committed an error of law in taking the view that such burden could only be discharged by the Department by leading positive evidence only. In our view the department could have relied on the facts and circumstances held established by asse-ssees own record as highlighted by the Income-tax Officer in his order. We thus consider that following question of law does arise from the order of the Tribunal. We accordingly framed the following question: "Whether in the facts and circumstances found by the Tribunal, there was material to come to the conclusion that the contracts of the assessee company with M/s. Dhartidhan (P) Ltd., Bombay and M/s. Madans Bombay for leasing out of exhibition rights to Cinema houses belonging to the assessee company, were real and genuine and income arising there from did not belong to the assessee company?" 22. We accordingly allow these applications and direct that the Income- tax Appellate Tribunal, Rajasthan, Jaipur, be required to state a case on the question indicated above and refer it to the High court for its opinion. In the circumstances of the case we direct the parties to bear their own costs.