JUDGMENT
In this case the assessee is a Hindu undivided family. The assessment relates to the assessment years 1949-50 and 1950-51, the relevant accounting years being Sambat 2004-05 and 2005-06. Janki Sao is the karta of the Hindu undivided family. He has two sons, Lakhan Lal and Punu Lal. The business of the Hindu undivided family was the manufacture of gold and silver ornaments. It was found by the taxing authorities that on the 11th of February, 1948, a sum of Rs. 18,000 was advanced on usufructuary mortgage of a house. On the 29th of June, 1949, the same property was purchased by Punu Lal for a sum of Rs. 29,500. A part of the consideration was the satisfaction of the mortgage debt and the balance of the amount, namely Rs. 11,500, was paid in cash. Both the documents, namely, the usufructuary mortgage bond dated the 11th of February, 1948, and the sale deed dated the 29th of June, 1949, were in the name of Punu Lal. On the 29th of June, 1949, there was an agreement between all the members of the Hindu joint family to the effect that the house property was really purchased by Punu Lal and the Hindu joint family had nothing to do with it. On the 1st of July, 1949, Janki Sao executed a kerayanama in favour of Punu Lal, agreeing to pay a rent of Rs. 24 per month for the use of the house for the purpose of the family business. On the 29th of November, 1950, there was a deed of family arrangement between Janki Sao and his two sons, Lakhan Lal and Punu Lal. It was recited in this document that the house property was purchased by Punu Lal from his individual funds and that Janki Sao and Lakhan Lal had nothing to do with it. Certain other properties were divided between the father and his two sons. In a proceeding taken under section 34 of the Income-tax Act the Hindu undivided family was asked to explain the source of the two amounts, namely, Rs. 18,000 and Rs. 11,500. In the course of these proceedings under section 34 Punu Lal and certain other witnesses were examined by the income-tax authorities. Punu Lal admitted that he had no profession and no independent source of income. He explained that he was married twice, once to the daughter of Lakshmi Sao and again to the daughter of Baldeo Sao. It was stated by Punu Lal that at the time of his first marriage he got 150 tolas of gold and Rs. 2,000 in cash, and at the time of his second marriage he got 32 tolas of gold and 1,000 tolas of silver from his father-in-law, Baldeo Sao. But the statement of Punu Lal has been falsified by the statements of Lakshmi Sao and Baldeo Sao. The evidence of Lakshmi Sao was that he gave Punu Lal at the time of marriage 50 tolas of gold and 150 to 175 tolas of silver. He also presented him 6 tolas of gold chain and 60 tolas of silver ornaments. Baldeo Sao stated that he presented about 15 tolas of gold ornaments and 135 tolas of silver ornaments to his daughter at the time of her marriage. The income-tax authorities held that the evidence of Lakshmi Sao was unreliable and that the explanation of Punu Lal that the source of money was the sale of ornaments belonging to his two wives was absolutely false. The Income-tax Appellate Tribunal rejected the evidence of Punu Lal and other witnesses and held that Punu Lal had given a false explanation and that there was evidence to support the inference that the two amounts of Rs. 18,000 and Rs. 11,500 represented the secreted profits of the business of the Hindu undivided family and was, therefore, liable to be taxed in the hands of the Hindu undivided family for the two assessment years in question. The views of the Income-tax Appellate Tribunal are summarised in paragraph 10 of the appellate order, which is in the following terms :
“10. Whether, onus as a determining factor of the whole case can only arise, if the Tribunal finds the evidence pro and con so evenly balanced that it can come to no sure conclusions. Then the onus will determine the matter. But if the Tribunal after the material on record comes to determinate conclusion the onus has nothing to do with it and need not be further considered. In this case, we have no hesitation in coming to a conclusion on the material on record. Therefore, there is no need to find out as to on whom is the whom is the onus. The Hindu undivided family has properties. They were divided by the partition deed. The Hindu undivided family has a business of long standing in gold and silver ornaments which yields income. Punu Lal has no independent source of income. We have already considered the reality of the source from which he is said to have found Rs. 29,000. In our opinion, the said amount could have come only out of the joint family business and no other source. It is important to note that the family business was being carried on in the very premises, which is purchased in the name of Punu Lal. It is difficult to believe that Punu Lal would have invested Rs. 29,000 to earn an income of Rs. 24 per month by way of rent. Having regard to all the evidence placed on record we have no hesitation in rejecting the contention that the investments were out of the funds of Punu Lal.”
Under section 66(1) of the Indian Income-tax Act the Appellate Tribunal has submitted the following question of law for the determination of the High Court :
“Whether in the facts and circumstances of this case, the investments in the name of junior member of the Hindu undivided family can be presumed to be investment of the assessee Hindu undivided family, and the unexplained amount of Rs. 29,000 was an income of the Hindu undivided family from an undisclosed source ?”
After hearing counsel for both the parties we consider that the question should be recast in order to bring out the real controversy between the parties. We think that the question should be recast in the following manner :
“Whether in the facts and circumstances of the case there is any material to hold that the amounts of Rs. 18,000 and Rs. 11,500 should be taxed as secreted income of the Hindu undivided family for the two assessment years 1949-50 and 1950-51.”
It was submitted by Mr. S.N. Dutta on behalf of the assessee that the Appellate Tribunal was wrong in holding that the presumption was that the disputed house was purchased by the funds of the Hindu undivided family and not by the funds of Punu Lal, the junior member of the Hindu undivided family. The Tribunal took the view that the onus was upon Punu Lal to establish that the house was purchased from his individual funds; and since the explanation of Punu Lal was false, the inference must raise that the house was purchased from the funds of the Hindu undivided family and the amount of Rs. 29,500 must be held to be the secreted profits of the Hindu undivided family from the gold and silver business. In support of his submission Mr. S.N. Dutta referred to Sir Padampat Singhania v. Commissioner of Income-tax, U.P., in which it was held by the Allahabad High Court that there was no presumption that any business carried on by a member of a joint Hindu family was joint family business and it was for those, who alleged that it was so, to prove it. It was also observed by the Privy Council in an earlier case, K.L.S.V.E. Annamalai Chetty v. K.L.S.V.E. Subramanian Chatty, that the law was well settled that it was open to a member of a Hindu undivided family to carry on a business and there was no presumption that any such business belonged to the joint family. But the principle does not apply to the present case, because it was not alleged that Punu Lal was carrying on any separate business or that he had made an acquisition of the disputed house from the income of his separate business. The principle applicable to the present case is somewhat different. It is well settled that in the case of a Hindu joint family where a nucleus of joint family property is proved or admitted, a presumption arises that the whole of the property of the joint family is joint, including any acquisition by a member of the joint family. The law on this point has been summarised at page 268 of Mullas Hindu Law, 11th edition, as follows :
“When a nucleus of joint family property is proved or admitted a presumption arises that the whole of the property of the joint family is joint including any acquisition by a member of the joint family. But no such presumption would arise if the nucleus is such that with its help the property claimed to be joint could not have been acquired. In order to give rise to the presumption the nucleus must be such that with its help the property claimed to be joint could have been acquired. When however it is not known whether the nucleus was such that from its income the property could be acquired, and no other source of income is disclosed, the presumption is to be made that the nucleus was sufficient to enable the property to be acquired. Such being the presumption, if any member of the family claims any portion of the property as his separate property, the burden lies upon him to show that it was acquired by him in circumstances which would constitute it his separate property. He may do so by showing that the income of the existing ancestral property was employed in other ways, or was kept intact. If he adduces no evidence, the presumption that the property was joint family property must prevail. The mere fact that it was purchased in his name and that there are receipts in his name respecting it does not render the property his separate property, for all that is perfectly consistent with the notion of its being joint property.”
We are of opinion that this principle applies to the present case; and in view of the circumstance that the explanation of Punu Lal about the source of the money was false explanation, it was open to the Appellate Tribunal to draw the inference that the amount of Rs. 29,500 was paid out of the funds of the Hindu joint family and, therefore, this amount represented the secreted profits of the Hindu undivided family for the assessment years in question.
We shall assume in favour of the assessee that this view of the law is not correct and that the presumption referred to in the last paragraph should not have been applied to the purchase money of the disputed house. Even so, we are of opinion that there was material before the Appellate Tribunal to support the inference that the amount of Rs. 29,500 represented the secreted profits of the Hindu undivided family and was taxable in its hands. In its appellate order the Tribunal has made it clear that even apart from the question of any presumption of law there was adequate material on the record of the case upon which an inference could be drawn that the purchase money of the house was paid out of the funds of the Hindu undivided family and not from the individual funds of Punu Lal. There was, in the first place, the circumstances that the Hindu undivided family was carrying on the business of gold and silver in the disputed house for more than twenty years. There was also the circumstance that Punu Lal had no independent source of income. There was also the important fact that Punu Lal gave deliberately false explanation as to how he acquired the money for taking the mortgage and for making the purchase of the disputed house. The Tribunal also adverted to the circumstance that the family business was continued to be carried on in the disputed house which was purchased in the name of Punu Lal. The Tribunal also remarked that it was very difficult to believe that Punu Lal would have invested Rs. 29,500 to earn an income of Rs. 24 per month by way of rent. Having considered all these materials, the Tribunal had no hesitation in holding that investments were made not out of the private funds of Punu Lal but out of the income of the Hindu undivided family. Apart from the question of onus and apart from the question of any legal presumption we are satisfied that there was proper material before the Appellate Tribunal for supporting the inference that the disputed amount of Rs. 29,500 represented the secreted profits of the Hindu undivided family and was liable to be taxed in its hands.
On behalf of the assessee Mr. S.N. Dutta conceded that the question involved in this case is a question of fact but learned counsel said that there is no evidence at all to support the finding of the Appellate Tribunal and, therefore, the High Court had jurisdiction to interfere with the finding of the Tribunal on this point. We do not agree with this contention. We have already said that the finding of the Appellate Tribunal is based upon proper material and we are satisfied that in the present case the question has not passed from the region of fact into the region of law, and hence the High Court has no authority to interfere with the finding of the Appellate Tribunal on the question referred. It is well established by a series of authorities that if the Tribunal decides a question of fact without any material at all, or if the Tribunal decides a question of fact by applying a wrong legal principle, the High Court has jurisdiction to interfere; but the High Court has no jurisdiction to interfere with the finding of the Tribunal merely because the High Court may take a different view upon the question of fact after an examination of the same material. The principle has been well stated by Lord Sterndale in Currie v. Commissioners of Inland Revenue :
“The first question that has been debated before us is this : Is the question whether a man is carrying on a profession or not, a matter of fact ? I do not know that it is possible to give a positive answer to that question, because it must depend upon the circumstances with which the court is dealing. There may be circumstances in which nobody could arrive at any other finding than that what the man was doing was carrying on a profession; and, therefore, taking it from the point of view of judge directing a jury, or any other Tribunal which has to find the facts, the judge would be bound to direct them that on the facts they could only find that he was carrying on a profession. That reduces it to a question of law. On the other hand, there might be facts on which the direction would have to be given the other way. But between those two extremes there is a very large tract of country in which the matter becomes a question of degree; and where it becomes a question of degree it is then undoubtedly, in my opinion, a question of fact; and if the Commissioners come to a conclusion of fact without having applied any wrong principle, then their decision is final upon the matter.”
In the present case we are not satisfied that the finding of fact reached by the Tribunal is based upon no material or that the Tribunal has misdirected itself in law in reaching that finding of fact. If follows, therefore, that the High Court has no jurisdiction to interfere with the conclusion reached by the Appellate Tribunal, and the question referred to the High Court by the Appellate Tribunal and as recast by us must be answered against the assessee and in favour of the Income-tax Department. The assessee must pay the costs of this reference. Hearing fee Rs. 250.
Reference answered accordingly.