LexMEENAKSHI MILLS, MADURAI versus THE COMMISSIONER OF INCOME-TAX, MADRAS.
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S.C.R. SUPREME COURT REPORTS MEEN AKSHI MILLS, MADURAI v. THE COMMISSIONER OF INCOME-TAX, MADRAS. [S. R. DAS C. J., VENKATARAMA AYYAR and JAFER IMAM JJ.] 691 Income·ttix-Referet1ce to High Court-Question of law-In· ference from findinqs of fact, when a qitcstion of law-Test-Profits earned by the assessee Company by sale of aood s entered in the names of d1immy fi1·ms aml Conipanies-Benami, Meaning of-Finding of the stcitm of wch firms and Companies, if and when material-Ac· crnal of liability-Manner of dealing with the profits by a registered Company, if affects its liability--Apportionment of pmfits between place of mannjc:,ct1tre and pince of sale, if a question of law-Indian Incomg-tax Act, (XI of 1922), ss. 66(1). 42(1), 42(8). A finding of fa.ct, even when it is an inference from other facts found on evidence, is not a question of law within the meaning of s. 66(1) of the Indian Income Tax Act that can be refei;.red to the High Court for its deoision. Such an inference can be a question of law only when the point for determination is a mixed question of law and fact. On the principles established by authorities, only such questions as relate to one or other of the following matters can be questions of law under the section:- (1) the construction of o. statute or a document of title; (2) the legal effect of the facts found where the point for determinatioI? ie a mixed question of lr.w and fa.ct; (3) a finding of fact unsupporled by evidence or nnrea,ponable r.nd perveri!e in nature. Although a finding of fa.ct which is not supported by any evi· dance or is unreasonable and perverse ma.y be challenged a.s an error of la.w, where there is evidence to consider the finding of the Tribn· na.l does not cease to be final simply because the Court may be iI?clined to take a view different from tha.t of the Tribunal. Great Western Railway Co. v. Bater, ((1922] 8 T. C. 231), followed. The soundness of a. conclusion ba.sed on a number of facts found on evidence must be judged by the cumula.tive effect of a.11 the facts and it is altogether a wrong approach to consider them indivi· dually in an isolated manner in order to explain them and show that inferences other than those drawn by the Tribunal could be drawn from them. 00 1956 Sej>tember 26 1956 Meenakshi Mills, Madurai v. Tlie Cointnissioner of Income-tax, Madras 692 SUPREME COURT REPORTS [1956] Edwards (Inspect-01' of Taxes) v. Bairstow, ([1955] 28 I.T.R. 579), referred to. Misa.pprecia.tion of evidence does not amount to want of evi .. dence a.nd unless the eviden'ce can be shown to be irrelevant or inadmissible, the conclusion of the Tribunal cannot be challenged on the ground that it is based on no lega'l evidence. The test as to whether a question is 'one of fact or one of mixed law and fact is this that while in determining II question of fact no application of any principle of law is required in finding either the ha.sic facts or arriving at the ultimate conclusion, in a mixed ques- tion of law and fact the ultimate conclusion has to be drawn by applying the relevant principles of law to the basic findings, Herbert v. Samuel Fox and Co. Ltd., ([1916] 1 A.O. 405) and The Queen v. Special Commissioners of Income-tax ((1894] 3 T. 0. 289), followed. The view expressed in a number of English decisions that an inference from facts is a question of la.w has reference really to ques- tions of mixed law and fact. Edwards(Inspect01· of Taxes) v. Bairstow, ([la55J 28 I.T.R. 579), Bamford v Osborne, ([1942] A.O. 14), Thomas Fattorini (Lancashire) Ltd. v. Commissioners of Inland Revenue, ([l!J42) A.O. 643), and Camer<m v. Prendergast, ([1940] A.O. 549), referred to and explained. The Gramaphone and. Tvpewriter Oompan11 Ltd. v. Stanle11 ((1908] 2 K.B. 89), held inapplicable. Tha American Thread Compan11.v. Jo11ce, ((1911] 6 T.C. 1) and The American Thread Company v. JOflC•, ((1918) 6 T.C. 168), relied. on. Nor do the observations made by the Privy Council in a number of cases lend any snpport tp the broad contention that inferences from facts are always and necessarily question• of law. Ram Gopal v. Shamskhat<m, ([1892] L.R. 19 I.A. 228), Najar Chandra Pal v. Shukur ((1918] L.R. 451.A. 183), Dhanna Mal v. Moti Sagar, ([1927] L.R. 54 I.A. 178), Wali Mohammad v. Mohammad Baksh, ([1929] L.R. 57 I.A. 86), Secretary of State for India in Coun· cil v. Rameswaram Devasthanam, ((1934] L.R. 61 I.A. 1
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