SHRIYANS PRASAD JAIN (DEAD) BY LRS.versusINCOME TAX OFFICER AND ORS.

             SHRIYANS PRASAD JAIN (DEAD) BY LRS.                                   A
                             v.
                INCOME TAX OFFICER AND ORS.

                           SEPTEMBER 14, 1993
                                                                                   B
          [B.P. JEEVAN REDDY AND S.P. BHARUCHA, JJ.)

       Income Tax Act, 1961-Section 245(c}-Settlement by Settlement Com-
mission-Whether question of genuineness of a document can be re-opened
before the Commission-Whether findings recorded by Inquiry Commission
appointed by Central Government, after exhaustive inquiry, have no eviden-         C
tiary value and do not constitute relevant material for settlement by Settlement
Commission-Whether this Court can inteifere with Commission's order on
findings offacts.

       The Appellant was appointed Officer-in-Charge, of Bombay Office of D
Dalmia Cement and Paper Marketing Company Ltd.(DCPM), by order
dated October 11, 1943. His salary was fixed Rs. 4,0000 per month, with
effect from April 1, 1943. It was also stipulated that the term of employ-.
ment shall be 25 years and that in case his services are terminated before
the expiry of the said period, he shall be paid compensation at the rate of
Rs. 40,000 per annum. Through letter dated February 14, 1950, services of E
the appellant were terminated with effect from November 30, 1949 and he
was paid Rs.7 lacs. In assessment proceedings relating to A.Y. 1950-51, the
appellant claimed that the said sum of Rs. 7 lacs was not taxable, under
section 7 of the Income Tax Act, 1922, as it had been paid by way of
compensation for loss of employment. The Income Tax Officer did not p
agree with that plea and included the amount in the income of the Appel-
lant. On appeal, the Assistant Appellate Commissioner upheld the
Appellant's plea. The appeal filed by the revenue against order of the
Assistant Appellate Commissioner was dismissed by the Tribunal. Ap-
plication filed by the Revenue under section 66(1) of the Income Tax Act,
1922 was dismissed by the Tribunal. Application under section 66(2) was G
also dismissed by Bombay High Court. On approach to this Court by
Revenue, the Court directed the Tribunal to refer to the High Court for
opinion, the question "whether on facts and circumstances of the case, the
sum of Rs. 7 lacs is liable to tax under section 7 of the Income Tax Act,
1922." The High Court answered the question in favour of the ApJ.>ellant. H
                                     279
    280                   SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.

A          Commissioner of Income Tax, Bombay City I v. S.P. lain, 56 l.T.R.
    724.

         The Revenue filed special leave petition against the order of the High
    Court, but withdrew it later.

B        The Government of India appointed a Commission of Inquiry•to look
  into the affairs of certain companies controlled by Dalmia - Jain group,
  including Dalmia Cement and Paper Marketing Company Ltd. The In-
  quiry Commission dealt with the aforesaid payment of Rs. 7 lacs to the
  appellant also. The main question considered was the truth and genuine-
C ness of the letter dated Order 11, 1943 and the propriety of the transaction.
  The Inquiry commission concluded that the impugned letter was an after
  thought and a device adopted to 'evade and avoid payment of income tax.
  A notice u/s 148 was issued to the appellant on the basis of the said Report.
  The appellant filed a writ petition in the High Court at Bombay, challeng-
D ing the validity of the notice. The writ petition was dismissed. The High
  Court opined that action under section 147 is justified where the Income
  Tax Officer takes a prima f acie view and entertains reasonable belief that
  the assessee omitted or failed to disclose truely and fully all material and
  primary facts. The Board was also satisfied with the reasons recorded by
  the Income Tax officer observed the High Court. Special leave Petition filed
E by the appellant against the order of the High Court was rejected by this
  Court. The appellant approached the Settlement Commission by applica-
   tion under section 245 (c) of the Income Tax Act. The Commission after
  inquiry and hearing the appellant, concluded that the sum of Rs. 7 lacs,
   received by the Appellant was of composite character. It apportioned the
  said sum into Rs. 2 lacs representing compensation for loss of employment
F
   (not subject to tax) and Rs. 5 lacs taxable under section 7 of the 1922 Act,
  and directed the appellant to pay the tax computed accordingly. The
   Commission did not grant immunity from penalty and prosecution, taking
   the view that the issue involved is one of law. The present appeal was
   preferred against the judgment and order of the Settlement Commission.
G This Court dismissed the appeal, with cost, to be paid by the Appellant,
   declined to make direction for dropping of penalty proceedings, and.

           HELD : That the findings recorded by the Inquiry Commission, may
     not be binding on the appellant but they do certainly carry some value, that
H    it is not necessary for the Court to go into the question whether, the
                  S.P. JAIN v. l.T.O. [JEEVAN REDDY, J.]                  281

Settlement Commission is barred from re-opening the question about truth         A
and genuineness of the letter date October 11, 1943, in as much as genuine-
ness of the letter had not been pronounced upon in the original assessment
proceedings, that the Court need not express its opinion on question of
burden of proof as the Settlement Commission had given several grounds,
in support of its finding about the character of the amount in question, that    B
this Court would not go into questions of fact and review the findings of fact
recorded by the Commission. This Court can interfere with the
Commission's order only if it is contrary to any provision of the Income Tax
Act as held by this Court earlier. [pp. 290-D-F; 291-B-E]

     Jyotendrasinhji v. S.l. Tripathi's & Ors., 201 ITR 611, Shreeram Durga      C
Prasad & Fatehchand Nurshing Das v. Settlement Commission, I.T. and W.T.
(1989) ITR 169 (SC).

      This Court further held that once, the aforesaid letter is disbelieved
the Settlement Commission's finding regarding apportionment of the sum
of Rs. 7 lacs is perfectly justified. [291-G]                                    D
     CIVIL APPELLATE JURISDICTION                   Civil Appeal No. 2702
(NT) of 1979.

      From the Judgment and Order dated 16.3.79 of the Income Tax
Settlement Commission, New Delhi in Application No. 6/1/59178-T.                 E
     B. Sen, S.R. Agarwal, Ms. Sarita Kapur and Ms. Bina Gupta fo~_the
Appellant.                                                  ·

     P.S. Poti, D.S. Mehra, V.K. Eradi, Ms. Malini Poduval and Ms. A.
Subhashini for the Respondents.                                                  F

      The Judgment of the Court was delivered by

      B.P. JEEVAN REDDY, J. This appeal is preferred against the judg-
ment and order of the Settlement Commission (Income Tax and Wealth G
Tax), New Delhi, disposing of the application filed by the appellant with
certain direction. The matter pertains to the Assessment-Year 1950-51

      The appellant, Shriyans Prasad Jain (since deceased) was appointed
as the Officer-in-Charge of Bombay office of the Dalmia Cement & Paper
Marketing Company Limited (DCPM) by an order date 11.10.1943. His H
    282                   SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.

A   salary was fixed at Rs. 4,000 per month - free of Income-tax. According to
    the appellant, the order of appointment further stipulated that the period
    of employment shall be 25 years and that in case his services are terminated
    before the expiry of the said period, he shall be paid compensation at the
    rate of Rs. 40,000 per annum for the unexpired period. The revenue, of
B   course, disputes the aforesaid stipulations relating to period of service and
    the provision for compensation in case of premature termination.

          Through a letter dated February 14, 1950, the services of the appel-
    lant were terminated with effect from November 30, 1959. An amount of
    Rs. 7 lacs was paid to the appellant on that occasion.
c
          In the assessment proceedings relating to Assessment-Year 1950- 51,
    the appellant claimed that the said sum of Rs. 7 lacs received by him was
    not taxable inasmuch as it represented compensation for loss of employ-
    ment. He submitted that according to the law as it then stood, the amount
D   paid by way of compensation towards loss of employment was not taxable.
    The Income-tax Officer did not agree with the submission and included the
    said amount in his income. On appeal, the Assistant Appellate Commis-
    sioner upheld the appellant's plea and allowed the appeal, whereupon the
    Revenue went in appeal to the Tribunal. This appeal was dismissed on
E   13.8.1956. An application filed by the Revenue under Section 66(1) of the
    Indian Income-tax Act, 1922 was dismissed by the Tribunal. An application
    under Section 66(2) was also dismissed by the High Court, whereupon the
    Revenue approached this court under Article 136 of the Constitution. This
    Court directed the Tribunal to refer the following question for the opinion
    of the High Court under Section 66(2) of the 1922 Act: "whether on the
F   facts and circumstances of the case, the sum of Rs. 7 lacs is liable to tax
    under Section 7 of the Income-tax Act, 1922."

           On February 8, 1965, the High Court at Bombay answered the
    reference in favour of the appellant and against the Revenue. It held that
G   the sum of Rs. 7 lacs represented compensation for loss of office and was
    therefore not taxable. The decision is reported in 56 ITR 724. Against the
    order of the Bomay High Court, the Revenue filed a special leave petition
    in this court but withdrew it later.

H         On December 11, 1956, the Government of India appointed Justice
                 S.P. JAIN v. I.T.O. [JEEVAN REDDY, J.]                   283

Vivian Bose, a retired Judge of this Court, as Commission f Inquiry to look A
into the affairs of certain companies controlled by Dalmia-Jain group. The
Commission submitted its report in June, 1962. The Commission found
several irregularities and fraudulent transactions by and between the com-
panies controlled by Dalmia-Jain group including the Dalmia Cement &
Paper Marketing Company Limited. The Commission also dealt with the B
aforesaid payment of Rs. 7 lacs to the appellant. The main question
considered in this regard was the truth and genuineness of the latter dated
October 11, 1943. In other words, the question was whether there was any
such letter of appointment prescribing the period of employment as 25
years and also providing for the amount of compensation payable in case
of premature termination. The findings of the Commission relevant for the
                                                                                c
purpose of this appeal are to following effect :-

        "Actually there was no decision about this (about the genuineness
        of the letter dated 11th October, 1943) on the merits because of a
        slip at the original stage, the question of its genuineness was shut    D
        out at the later stage. But so far we are concerned, it would not
        have mattered whether the matter was considered and finally
        decided on the merits or not. Even if there was a final decision on
        the merits, it would be final only for the purposes of those
        Tribunals and would not bind other Tribunals or this Commissions        E
        investigating the matter afresh for any other purposes."

         xxx                         xxx                            xxx

        "The question before the Income-tax authorities was whether the
        receipt of Rs. 7 lacs was taxable or not in the hands of Shriyans
                                                                                F
        Prasad Jain. We are not however, looking into this question viz.
        taxability or otherwise of the payment of Rs. 7 lacs what we are
        concerned with is the propriety of the transaction itself."

        The Commission had further observed:                                    G

        "we do not deny that Shri Shriyans Prasad worked for DCPM from
        1943 and that he drew remuneration specified in the Liquidator's
        letter of the 1st May, 1953 to Mis D.P. Khosla and Co., nor did
        we question that the Income-tax was paid as stated during that H
    284                  SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.

A           period. We have questioned in another place the reasonableness
            of the terms but not the fact of appointment on those terms. What
            we are questioning _here are the terms about period of employment
            and the provision about the payment of compensation for the
            breach that finds place in the impugned letter. In our opinion, that
B           was an after-thought. We are of the view that those terms do not
            appear in the origi.nal contract. The scheme to defraud the exche-
            quer by these ingenious devices was devised later and the im-
            pugned letter was forged and antedated in furtherance of that
            scheme."

c           "In the circumstances indicated above specially regarding the
            destruction of the letter immediately after the Inspector had drawn
            up his report and in face of the fact, that the Inspector had
            questioned the genuineness of this document and initialled it and
            affixed the rubber stamp of his office to it; and also in view of the
D           failure of Shriyans Prasad to produce before the Commission the
            original letter, which was with him, and the very important fact
            that during this period there was some payments of compensation
            for the supposed purchase of managing agencies and selling agen-
            cies agreement, in a number of other cases, we are entitled to drew
E           the conclusion that this is one more instance of device adopted to
            evade and avoid payment of substantial income-tax."

            (Quoted from the paper-book supplied by the appellant).

          On December 23, 1965, a notice was issued by the Revenue calling
F   upon the appellant to explain why his assessment relating to the Assess-
    ment-Year 1950-51 be not reopend on the basis of the information which
    had come into possession of the department. The findings of Justice Vivian
    Bose Commission were sought to be made the basis for such action. The
    appellant submitted a reply to the said notice after considering which a
G   considering which a notice under Section 148 of the Income-tax Act, 1961
    was issued on March 26, 1966. Soon after receiving the said notice, the
    appellant approached the Bomaby High Court by way of Writ Petition
    under Article 226 of the Constitution challenging the validity of the notice
    under Section 148 of the Income-tax Act, 1961. On July 04, 1973, the Writ
H   petition was dismissed by the High Court. The High Court opined :
                 S.P. JAIN v. I.T.O. (JEEVAN REDDY, J.]                   285

        "If upon consideration of material before him the Income-tax              A
        Officer takes a p1ima facie view and entertains a reasonable belief
        that the assessee omitted or failed to disclose truly and fully all
        material and primary fact, then action under Section 147 (1) is
        always justified. It is conceivable that such reasonable belief as to
        omission or failure to disclose may arise as a result of information      B
        which may come to his knowledge but even in such cases if the
        assessee has omitted or failed to disclose truly and fully all material
        and primary facts, it will always be open to take action under
        Section 147 (a). Under Section 151 (1) no notice shall be issued
        under Section 148 after the expiry of eight years from the end of         C
        the relevant assessment year, unless the Board is satisfied on the
        reason rec9rded by the Income-tax Officer that it is a fit case for
        the Issue of such notice. The notice under Section 148 in the
        present case has been issued after the expiry of eight years from
        the end of the assessment year 1950-51 but the Central Board of           D
        Direct Taxes upon a report submitted by the Income-tax officer
        has accorded it sanction for initiation of proceedings against the
        assessee for the assessment year 1950-51 under Section 147(a) of
        the Act. In that view of the matter it is not possible to take the view
        that the initiation of proceedings can be regarded as time-barred.
        Accordingly, the notice for initiation of reassessment proceedings        E
        will have to be upheld in so far as it relates to the item of Rs. 7
        lacs paid by the company to the petitioner. " [94 ITR 34 P.53].


       The appellant sought to question the judgment of the Bombay High
Court by way of special leave petition in this Court which was rejected on
                                                                           F
24the February, 1975. The Income-tax Officer completed the reassessment
on July 30, 1977. At that stage the appellant approached the Settlement
Commission by way of an application under Section 245C of .the Act. After
making the necessary inquiry and after hearing the appellant, the Commis-
sion passed order on March 16, 1979. The Commission held that the G
amount of Rs. 7 lacs received by the appellant was of a composite charac-
ter. It apportioned the said sum into Rs. 2 lacs representing the compen-
sation for loss of employment (not subject to tax) and Rs. 5 lacs taxable
under Section 7 of the 1922 Act. On the basis it computed the income of
the appellant for the said Assessment-Year and directed him to pay the H
    286                  SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.

A tax in four equal quarterly instalments, along with interest in the manner
    specified by it. The Commission further opined that since the issue involved
    in the Settlement is one of law, the question of granting immunity from
    penalty and prosecution does not arise.

          Mr. B. Sen, learned counsel of the appellant urged the following
B contentions:-

    (1) The Settlement Commission was in error in placing upon the appellant
    the onus of proving that he said payment was solely in connection with the
    termination of employment within the purview of explanation 2 of Section
C   7 of the 1922 Act. In a reassessment proceeding, the burden lies upon the
    Revenue to establish that there has been concealment and that there has
    been an escapement of income.

    (2) The Revenue led on evidence whatsoever to establish its case and to
D   establish the taxability of the said amount or any part thereof. It merely
    relied upon the Report of justice Vivian Bose Commission which was in to
    way binding upon the appellant. The findings of the Commission have no
    evidentiary value.

    (3) That the settlement Commission was in error in holding that the letter
E dated February 11, 1943 was not true and genuine. The said letter was
    produced by the appellant in the original assessment proceedings and both .
    the Appellant Assistant Commissioner and the Tribunal had in fact gone
    into the question of its genuineness and found it to be a genitine document.
    The said finding had become final and could not have been reopened either
F   in reassessment proceedings or by the Settlement Commission in proceed-
    ings under Chapter XIX-A of the Act.

    (4) The finding of the Tribunal with respect to the said letter is based on
    no evidence. It is a case of pure guess.

G          Shri P.S. Poti, the learned counsel for the Revenue supported the
    reasoning and conclusion of the Settlement Commission. He submitted that
    the findings recorded by the Commission are not subject to review in this
    appeal. The learned counsel submitted that in the absence of the appellant
    establishing that the order of Commission is violative of any of the
H   provisions of the Act, no relief can be granted to him in this appeal. He
                 S.P. JAIN v. i.T.O. [JEEVAN REDDY, J.]                   '2537

relied upon the decision of this Court in Jyotendrasinhji v. SJ. Tripathi &       A
Ors., [210 ITR 611].

      Section 7 of the Indian Income-Tax Act, 1922 read as follows at the
relevant time :

        "Salaries- (1) The tax shall be payable by an assessee under the          B
        head "salaries" in respect of any salary or wages; any annuity,
        pension or gratuity, and any fees, communications, perquisites or
        profits in lieu of, or in addition to, or are paid by or on behalf of,
        the Government, a local authority, a company, or any other public
        body or association, or any private employer; and for the purposes        c
        of this sub-section advances by way of loan or otherwise of income
        chargeable under this head shall be deemed to be salary due on
        the date when the advance is received :

        (Provisos and the explanation (1) of Section 7 omitted as unneces-        D
        sary).

        [Explanation 2. - A payment due to or received by an assessee
        from a provident or other fund 1* * •, is to the extent to which it
        does not consist of contributions by the assessee or interest on          E
        such contributions a profit received in lieu of salary for the pur-
        poses of this sub-section, unless the payment is made solely as
        compensation for loss of employment and not by way of remunera-
        tion for past services :

        Provided that nothing herein contained shall render liable to F
        income-tax any payment from a provident fund to which the
        Provident Funds Act, 1925 (XIX of 1925), applies, of any payment
        from a recognised provident fund within the meaning of Chapter
        IXA if such payment is exempted from payment of income-tax
        under the provisions of Chapter IXA, or any payment from an G
        approved superannuation fund within· the meaning of Chapter
        IXB made on the death of a beneficiary or in lieu of or in
        commutation of an annuity, or by way of refund of contributions
        on the death of a beneficiary or on his leaving the employment in
        connection with which the fund is established]" Sub-section 2. H
    288                  SUPREME COURT REPORTS [1993] SUPP. 2 S.C.R.

A           Omitted unnecessary.

          The Revenue relied upon explanation 2 aforesaid. According to it.
    the said sum of Rs. 7 lacs was a payment received by the appellant from
    his employer, that it did not comprise or consist of contributions made by
    the appellant and inasmuch as the appellant has failed to prove that the
B   said payment was made solely as compensation for the loss of employment,
    the amount is taxable. The Revenue submitted that the said amount: can be
    characterised as remuneration for past services as well. On the other hand,
    the appellant's case was that the said amount was paid to him solely as
    compensation for loss of employment and hence, not taxable. According
C   to him the said amount was not paid to him by way of remuneration for
    past services.

           To establish his case that the said amount was paid to him solely as
    compensation for loss of employment he relied upon the letter of appoint·
D   ment dated October 11, 1943, aforesaid. According to the appellant, the
    letter read as follows :

               "DALMIA CEMENT & PAPER MARKETING CO., LTD.
                            DALMIANAGAR.

E           Syt. Shriyans Prasad .T ain,                     October 11, 1943.
            BOMBAY.

             Dear Sir,

             Confirming the negotiations that have been carried on between
F            this company and yourself, this is to confirm that you will please
             look after the Bombay office Organisation of this company, for
             which you will be paid a fixed amount of Rs. 4,000 (Rupees Four
             Thousand only) per month. Income-tax and super-tax due and
             payable on this amount of remuneration will be paid by the
G            company according to the rate prescribed in the yearly financial
             acts. Conveyance and entertainment allowances will be allowed as
             may be agreed upoa from time to time.

             The term of employment will be for a definite period of 25 years
H            commencing from the 1st April, 1943 and the Company reserves
                 S.P. JAIN v. !.T.O. [JEEVAN REDDY, J.]                 289

        to itself the right to depute you to look after the interests of any A
        other concern and arrange for your remuneration being paid either
        by that other concern or itself meet the same.

        You have requested that it should be made clear that should your
        services be terminated before the expiry of 25 years then a definite
        compensation for loss of office and breach of agreement should
                                                                               B
        be provided. In confirming that on the occurrence of any such
        contingency of our servering connections with each other or ter-
        minating the office of employment due to any reason whatsoever,
        it is hereby stipulated that you will be entitled to a compensation
        and the same shall be calculated as equivalent to Rs. 40,000 for       C
        each unexpired year of the duration of your employment.

        This is being addressed to you in duplicate. Kindly acknowledge
        in the duplicate and send same for our file keeping the original
        for our own record.                                              D
                                       Yours faithfully,
                         For Dalmia Cement & Paper Marketing Co.
                         Limited.

                                                                               E
                                  Sd/- Vishnu Hari Dalmia
                                          Director."

      The letter, if true, dies support the appellant's case. The Settlement
Commission, however~ has doubted the same. It has rejected the very
existence of the said letter, relying substantially upon the Report of the F
Justice Vivian Bose Commission quoted hereinbefore. It commented upon
the unusual nature of the stipulations with respect to the period of employ-
ment and compensation for premature termination contained therein. It
also stressed the conduct of the appellant in suppressing the said letter
from the Commission as recorded in the Report of Justice Vivian Bose G
Commission. The Settlement Commission was of the opinion that though
the appointment of the appellant was with effect from April 1, 1943, the
impugned letter containing the alleged terms and conditions of employ-
ment is , strangely enough, dated October 11, 1943 - nearly six month later
- and further that while there is no letter informing the applicant that his H
    290                    SUPREME COURT REPORTS [1993) SUPP. 2 S.C.R.

A services would no longer be required after November 30, 1949, there is the
     letter of February 14, 1950 agreeing to pay compensation. This too is
     somewhat strange, said the Commission. It also noticed the close relation-
     ship between the appellant and the persons controlling the company
     (DCPM) and opined that the appellant occupied a special position in the
B    company. Though he was stayed as an employee, he was in fact a part of
     the management. In short, the Commission not only relied upon the
     findings of Justice Vivian Bose Commission but also gave several other
     reasons in support of its finding. It is, therefore, not correct to say that the
     said fmding is based on no evidence or that it is in the nature of a pure
     guess.
c
         Mr. B. Sen is not right in submitting that the genuineness of the letter
  was gone into in the original assessment proceedings and that the fmding
  recorded therein in appellant's favour is not open to review either in the
  reassessment proceedings or by the Settlement Commission. So far as the
D Assessing Officer is concerned, admittedly he did not refer to the said
  aspect. He did say that the said letter was produced before him but he did
  not says whether the letter produced before him was the original or a copy.
  So far as the Appellate Assistant Commissioner is concerned, he merely
  observed in his order that "there is on record an agreement dated
E 11.10.1943." The genuineness of the said letter was not put in issue before
  him. It is true that before the Tribunal, the departmental representative
  sought to challenge the genuineness of the said letter; but the said chal-
  lenge was not allowed to be raised. The Tribunal held that it was not open
  to the department to attack the genuineness of the said agreement/letter
  for the first time at the stage of Tribunal. It is, therefore, not correct to say
F
  that the genuineness of the letter was pronounced upon by the authorities
  in the original assessment proceedings. In this view of the matter, it is not
  necessary for us to go into the question whether, if any such finding has
  been recorded, would it operate as a bar to reopening the said question in
  reassessment proceedings or before the Settlement Commission.                         r
G
          With respect to the objection regarding the relevance and binding
    nature of the findings recorded by Justice Vivian Bose Commission, we
    must say that the findings recorded by the said Commission may not
    certainly be binding upon the appellant in proceedings under the Act but
H   it is wrong to say that they do not constitute relevant material. They
                  S.P.JAIN v. I.T.O. (JEEVAN REDDY,J.]                   291

undoubtedly constitute relevant material. Further, before they were relied      A
and acted upon, the appellant was given an opportunity to meet the same.
It is idle to contend that findings recorded by a Commission manned by
an eminent Judge is off no evidentiary value. The· said findings were
recorded after an exhaustive inquiry and examination of the relevant
records, account books and other proceedings of the companies controlled        B
by Dalmia-Jain group.

       We are equally unable to agree with Mr. Sen that the order of the
Settlement Commission is vitiated by the erroneous placing of burden of
proof upon the appellant. The Commission has given as many as eight
specific reasons (mentioned as 'a' to 'j') in support of its finding that a     c
major portion of the said amount is taxable under Section 7 of the Act.
Even if it is assumed for the sake of argument that one of the said reasons
is unsustainable in law that doe~ not vitiate the order of the Commission.
The other reasons given by it are perfectly adequate to support the finding
of the Commission. By saying so, we should not be understood as upholding D
Mr. Sen's argument with respect to burden of proof. We express no
opinion thereon.

       Mr. Poti, learned counsel for the Revenue, is right in submitting that
in this appeal this Court would not go onto questions of the fact or review     E
the findings of fac< recorded by the Commission. As pointed out by this
Court in Jyotendrasinhji v. S.!. Tripathi's case, (supra) this Court can
interfere with the Commission's order only if it is found to be "contrary to
any of the provisions of the Act". To the same effect is the earlier decision
of this Court in Shreeram Durga Prasad & Fatehchand Nursing Das v.
Settlement Commission, [I.T. and W.T. (1989) ITR 169 (SC)].
                                                                                F

      No serious objection has been taken with respect to the apportion-
ment of the said amount of Rs. 7 lacs effected by the Commission. Indeed,
no such objection could have been taken. Once, the letter aforesaid is
disbelieved, the Commission's finding in this behalf is perfectly justified.    G

      We are, therefore, of the opinion that the Commission was right in
holding that a substantial portion of the said amount should be treated as
taxable under and by virtue of explanation 2 to Section 7 of the Indian
Income-tax Act, 1922.                                                      H
    292                  SUPREME COURT REPORTS (1993) SUPP. 2 S.C.R.

A         Mr. Sen submitted lastly that the matter is more than 40 years old,
    that the original assessee is dead and that it would be just in these
    circumstances to direct that the penalty proceedings initiated against the
    assessee - which are said to be kept pending - be dropped. We are afraid,
    we cannot make any such direction in this appeal at this stage.
B       . The appeal accordingly fails and is dismissed with costs. The
    Respondents costs are assessed at Rs. 7,500 consolidated.

    I.S.G.                                                  Appeal dismissed.




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