Chagla, C.J.
1. This is one of those unfortunate cases where moral principles cannot be given effect to by reason of the provisions of the Income-tax Act.
2. The assessee is a broker and he effected various transactions in cotton in the assessment years 1944-45 and 1945-46 and the I. T. O. came to the conclusion that the five payments made in the assessment year 1944-45 -- a payment of Rs. 6,77,875/- to C. H. Ghanekar, Rs. 54,100/- to Narayandas Joharmal, Rs. 34,8757- to L. V. Iyer, Rs. 4,600/- to Miss P. Grant and Rs. 4,707/- to Dharsey Chapsey -- and in the assessment year 1945-46 a sum of Rs. 2,18,669/- to the same C. H. Ghanekar and a sum of Rs. 1,09,375/- to one Keshar-deo Hanumanbux, were not genuine payments of profits and therefore he included these profits in the assessment of the assessee.
The A. A. C. confirmed the assessment order and when the matter came to the Tribunal the Tribunal remanded the matter to the I. T. O. ana the L T. O. submitted a remand report and on that report on a careful consideration of the evidence the Tribunal held that it was established beyond any doubt that Ghanekar, Iyer and Keshardeo Hanumanbux were the benamidars of Ramanarain Sons Ltd., that the assessee knew that he was dealing with Ramnarain sons Ltd. and not with these individuals, that these individuals were men of straw and it was impassible to believe that the assessee would deal with them for such large amounts and further that the assessee was a party to concealing the fact that these profits represented the income of Ramnarain Sons Ltd.
On this the Tribunal held with regard to these four payments that they were the income of the assessee and that the assessee was liable to tax.
3. We entirely endorse the moral indignation felt by the Tribunal. We also join the Tribunal in condemning the action of the assessee for being a party to perpetrating what was really a fraud upon the revenue. But the Income-tax Act, as have often observed, unfortunately does not concern itself with moral considerations. The Income-tax Act is concerned with a very limited question as to whether the amount brought to tax constitutes the income of the assessee.
At the worst the finding of the Tribunal comes to this that the assessee helped Ramnarain Sons to conceal its income, and by permitting Ramnarain Sons to put forward benamldars with whom the assessee dealt, the profits earned could not be brought to tax. But that finding itself obviously leads to the conclusion that the income was the income of Ramnarain Sons and not of the assessee. It is not a finding of the Tribunal that these three persons were the benamdars of the assessee, nor is it a finding of the Tribunal that these payments were never made and that the profits remained with the assessee himself.
The Tribunal expressly found that these payments were made but they were not made to those individuals but they were made to Ramnarain Sons through the instrumentality of Ghanekar, lyer and Keshardeo Hanumanbux. If the payments were made to Ramnarain Sons and Ramnarain received the payments, theii the profits were not the profits of the assessee but of Ramnarain Sons. In no view of the case is it possible to take the view that these profits constituted the income of the assessee.
4. it may be said that on these facts the assessee helped Ramnarain Sons to evade the payment of tax on these profits, but unfortunately the Income-tax Act does not contain any provision which permits the taxing department to include in the income of an assessee the income of some one else because the assessee has helped that some one else to evade payment of tax on that income.
If such a provision had been there in the Income-tax Act, then undoubtedly this income might have been deemed to be the income of the assessee; but in the absence of such a provision it is difficult to understand by what provision of the Income-tax Act this income, which admittedly on the finding of the Tribunal is the income of Ramnarain Sons, could possibly be faxed in the hands of the assessee. Therefore, with considerable regret we are unable to accept the conclusion arrived at by the Tribunal that the assessee can be assessed to tax with regard to the payments made to Ghanekar, Iyer and Keshardeo Hanumanbux.
5. With regard to the payments made to Narayandas Joharmal, Miss P. Grant and Dharsey Chapsey, the position is very different. The A. A. C. confirming the order of the I. T. O. held that Narayandas Joharmal, Miss P. Grant and Dharam-sey Chapsey were fictitious persons and that no payments were made to these persons as alleged by the assessee and in the remand report as far as Miss Grant is concerned the I. T. O. expressly found that Miss Grant had nothing whatever to do with Ramnarain Sons, and in the decision of the Tribunal there is no finding that Narayandas Joharmal, Miss Grant and Dharamsey Chapsey were the benamidars of Ramnarain Sons or that the moneys paid to these three persons in fact went to Ramnarain Sons. Therefore, if not expressly, by Implication the Tribunal has accepted the finding of the I.T.O. and the A. A, c. that these three payments were fictitious, that the persons to whom the amounts were alleged to have been paid did not exist and that in otKer words these amounts were paid to the assessee himself and constituted the profits of the assessee.
Under these circumstances, we do not see why there was no evidence on which the Tribunal could have held that the amounts paid to Narayandas Joharmal, Miss Grant and Dharamsey Chapsey constituted the income of the assessee which could be subject to tax.
6. Question No. (1) will have to be modified. It seems that two separate petffions were presented by the assessee in respect of the assessment years 1944-45 and 1945-40 and two separate rules were issued. Through an error which could easily have been avoided, in drawing up the order made by this Court, both for the assessment years 1944-45 and 1945-46, the same figures as for the year 1944-45 were inserted in Both the orders, with the result that in the question wntch has been referred to us by the Tribunal only the figures of the assessment year 1944-45 were incorporated.
We are satisfied that this is clearly an error, although this may be considered to be a negligent error, as the rule was granted both with regard to the assessment year 1944-45 and the assessment year 1945-46, and the petition, as we have already pointed out in our judgment, with regard to the assessment year 1945-46 is the same as the year 1944-45. Therefore, we amend tRe question No. (1) by adding:
'Whether the Tribunal erred in law regarding the sums of Rs. 2,18,669/- paid to C. H. Ghanekar and Rs. 1,09,375/- paid to Keshardeo Hanumanbux.'
7. We will answer the question that the Tribunal erred in law regarding the sum of Rs. 6,77,875/- paid to C. H. Ghanekar, and the sum of Rs. 34,875/- paid to L. V. Iyer, as also tne sum of Rs. 2,18,669/- paid to C. H. Ghanekar and the sum of Rs. 1,09,375/- paid to Keshardeo Hanumanbux; and the answer to Question NO. (2) will be that there was evidence before the Tribunal with regard to the sums of Rs. 54,100/- paid to Narayandas Joharmal, Rs. 4,600/- paid to Miss Grant and Rs. 4,707/-paid to Dharamsey Chapsey.
8. No order as to costs.
9. Answer accordingly.