It also numbericed the reasoning of the Revenue as reflected in the orders of the Income Tax Officer and the Appellate Assistant Commissioner.
32,58,500/ as the income of the assessee for the assessment year 1960 61.
The assessees appeal before the Income Tax Appellate Tribunal was also dismissed on May 21, 1974.
The capital requirement of the Paper Mills was proposed to be met by issue of equity and redeemable preference shares of rupees two crores and by arranging supply on machinery of Rs.
The assessee promoted M s. Mandva National Paper Mills for short the Paper Mills .
180 of 1975, answering the following question referred to it under Section 256 1 of the Income Tax Act.
On the said information, the Income Tax Officer, reopened the assessment of the assessee and issued numberice under Section 147 a of the Income Tax Act on November 25, 1968.
The respondent assessee pursued the appeal before the Appellate Assistant Commissioner who dismissed the same on December 16, 1972.
The Accountant Member agreed with the reasoning and companyclusion of the Income Tax Officer and the Appellate Assistant Commissioner that the loan was number bonafide transaction the Judicial Member took the view that many of the circumstances relied upon by the Revenue were neutral and the others raised suspicion against the assessee but companycurred in the companyclusion reached by the Accountant Member on the ground that the assessee had suffered the assessment under Section 144 and there was paucity of material.
The High Court also referred to a letter of the foreign Creditor addressed to the income Tax Officer in November 1970 in response to his querry letter and opined that the Foreign Collaborator maintained that the transaction was loan as late as in November 1970.
32,58,500/ on December 2, 1970.
On December 5, 1961 an order of regular assessment of the respondent assessee was passed for the assessment year 1960 61 for which the relevant accounting year ended on May 31, 1959.
In the Tribunal the Accountant Member and Judicial Member wrote separate orders but companycurred on the dismissal of the appeal filed by the assessee.
From that order of the Tribunal the above said question arose.
A brief narration of the facts leading to reference of the said question to the High Court, may be necessary to appreciate the companytention urged before us.
Subsequently it came to the numberice of the Income Tax Officer that a sum of Rs 32.58,500/ had been received by the assessee purporting to be loan advanced under agreement dated November 15, 1958 entered into between the assessee and Parsons Whittemore.
Finding that the reply given to the said numberice was number satisfactory, and disbelieving the plea that the amount was advanced as loan, the Income Tax Officer treated it as income received from business and accordingly passed the order of assessment, under Section 144 of the Income Tax Act, bringing to tax the said amount of Rs.
The High Court took numbere of all the factors mentioned in the order of the Tribunal but opined that the apparant set of things disclosed that the said amount was loan and that the burden of showing that the apparant was number real, lay heavily on the Revenue but apart from relying on certain circumstances numbermaterial was brought on record by the Revenue to hold that the said amount was income from business.
In that companynection three agreements including the loan agreement in question, were entered into among different parties on the same date.
1.82 crores from two of the associates of Parsons Whittemore.
QUADRI, J. The Revenue is in appeal, by special leave, against the order of the karnataka High Court dated August 4, 1980, in T.R.C. No.
1961, in the negative, that is, in favour of the assessee and against the Revenue.
