PURANLAL RAJKUMAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal has referred the following question of law to this Court under S. 256(2) of the IT Act :

(2.) THE assessment year involved is 1971-72 for which the relevant year of accounting is 2027 R.N. The facts as stated by the Tribunal in the statement of case is as under : The assessee is a dealer in scrap matter. While examining the assessee's bank account with the State Bank of India, Siliguri along with the books of accounts Moolji Iron & Steel Industries, the ITO found that the assessee had overdraft of Rs. 1,99,403 as on 3rd April, 1971, the last day of the previous year relevant to the assessment year under appeal. The ITO asked the assessee to file a letter from the State Bank of India, Silliguri showing goods hypothecated or pledged on 3rd April, 1971 against the said overdraft of Rs. 1,99,483. The assessee, however, showed its inability to file such a letter on the ground that the bank refused to issue a letter unless the IT authorities write to them directly. The ITO naturally became suspicious of the plea taken by the assessee. The ITO, thereupon, wrote a letter to the said bank for necessary details. The ITO got a letter from the bank showing the details of steels pledged with the bank as under : The ITO asked the assessee to reconcile the quantity shown to the bank and in the books of accounts. But the assessee failed to reconcile the discrepancy with regard to the stocks as shown in the books of the bank and as shown in its own books. Thereupon the ITO held that the excess stock of 595 MT pledged with the bank was not reconciled and as such the value thereof at Rs.

(3.) THE Supreme Court in the case of CIT vs. Durga Prasad More reported in 1973 CTR (SC) 500 : (1971) 82 ITR 540 (SC) observed that science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and Tribunals have to judge the evidence before them by applying test of human probabilities. Human minds may differ as to the reliability of a piece of evidence. But in that sphere, the decision of the final fact-finding authority is made conclusive by law. The Supreme Court further observed that at any rate what value should be attached to a piece of evidence was for final-fact finding body to decide.