10 May 1956
Supreme Court


Case number: Appeal (civil) 81 of 1954






DATE OF JUDGMENT: 10/05/1956


CITATION:  1956 AIR  554            1956 SCR  626

ACT: Income-tax-Income   from   undisclosed    sources-Assessment Assessee’s  explanation  based  on  accounts  supported   by affidavits  Accounts accepted as genuine and  statements  in affidavits  not controverted-Finding based on  no  evidence- Inference from proved or admitted facts-If questions of law- Principle  of  interference  Indian Income-tax  Act  (XI  of 1922), ss. 62(2), 23(3), 26-A.

HEADNOTE: The appellants, a partnership firm assessed under ss.  23(3) and  26-A  of the Income-tax Act, were called  upon  by  the Income-tax  Officer  during the assessment year  1947-48  to explain how and when they came to possess 61  thonsand-rupee currency notes which they had encashed on the 18th  January, 1946,  after the promulgation of the High Denomination  Bank Notes  (Demonetisation) Ordinance of 1946, under which  such notes ceased to be legal tender on the expiry of the 12th of January,  1946.   The  assessees  produced  their  cash-book entries  from the 20th December, 1946, to the 18th  January, 1946,  which  were  accepted as correct  by  the  Income-tax Officer,  who,  however,  made no further  scrutiny  of  the accounts,  and,the  entries  showed  that  on  the  12th  of January, 1946, the cash balance in hand was Rs.  69,891-2-6. The  case of the appellants was that the said notes  were  a part  of  the cash balance and in further support  of  their case -they filed before the Appellate Assistant Commissioner three affidavits by persons actually making the payments, in respect  of certain entries in the cash-book to  prove  that Rs. 20,000 on the 28th December, 1946, Rs. 15,000 on the 6th of January, 1946, and Rs. 8,000, out of a sum of Rs.  8,500, on  the  6th of January, 1946, were paid  in  thousand-rupee notes.   The Income-tax Officer and the Appellate  Assistant Commissioner in appeal, on a calculation of their own,  held that  the possession by the appellants of so many  thousand- rupee  notes was an impossibility and that these notes  must represent  income from, undisclosed sources and as  such  be added  to the assessable income of the appellants.   Neither the  Appellate  Assistant Commissioner  nor  the  Income-tax Officer,  who  was  present at the hearing  of  the  appeal, called for the deponents in order to cross-examine them with



reference  to  their  statement  in  the  affidavits.    The Appellate,  Tribunal on appeal accepted the  explanation  of the  assesses  in respect of 31 of the notes  but  not  with regard  to  the rest and rejected their  application  for  a reference  of the matter to the High Court.   The  assessees moved the High Court and the Tribunal was directed under  s. 66(2) to state 627 a  case for its decision.  In answering the  main  question, the  High Court was of the opinion that the finding  of  the Tribunal was a finding of fact or an inference based on such finding and it was not possible to say that such finding  or inference was unreasonable or arbitrary. Held  (per  curiam),  that the High Court was  in  error  in refusing to interfere with the finding of the Tribunal which was based on no evidence and the appeal must succeed. Per  C.J. and BHAGWATI J.-Conclusions based on facts  proved or  admitted  may  be  conclusions of  fact  but  whether  a particular  inference  can legitimately be drawn  from  such conclusions  may be a question of law. Where,  however,  the fact  finding  authority has acted without any  evidence  or upon  a  view  of  the  facts  which  could  not  reasonably be  entertained or the facts found were such that no  person acting judicially and properly instructed as to the relevant law could have found, the court is entitled to interfere. Chunilal Ticamchand Coal Co. Ltd. v. Commissioner of Income- tax, Bihar and Orissa, ([1955]) 27 I.T.R. 602), applied. Cameron  v.  Prendergast  (Inspector of  Taxes),  ([1940]  8 I.T.R. (Suppl.) 75), Bomford v. Osborne (H.  M. Inspector of Taxes),   ([1942]  10  I.T.R.  (Suppl.)  27)   and   Edwards (Inspector  of  Taxes) v. Bairstow and Another,  ([1955]  28 I.T.R. 579), referred to. The  High Court was in error in treating the finding of  the Tribunal  as a finding of fact and failed to apply the  true principles of interference applicable to such cases. The  entries  in cash-book and the statements  made  in  the affidavits in support of the explanation. which were binding on  the Revenue and could not be questioned, clearly  showed that  it was quite within the range of possibility that  the appellants had in their possession the 61 high  denomination notes  on the relevant date and their explanation could  not be assailed by a purely imaginary calculation of the  nature made  by the Income-tax Officer or the  Appellate  Assistant Commissioner. The  Tribunal made a wrong approach and while accepting  the appelants’  explanation with regard to 31 of the  notes,  it had absolutely no reason to exclude the rest as not  covered by  it in absence of any evidence to show that the  excluded notes were profits earned by the appellants from undisclosed sources.    The   appellants  having  given   a   reasonable explanation  the Tribunal could not, by applying a  rule  of thumb, discard it so far as the rest were concerned and  act on mere surmise. Per  VENKATARAMA AYYAR J.-The finding of the  Tribunal  that high denomination notes of the value Rs. 30,000  represented concealed profits of the appellants being unsupported by any evidence  amounted to an error of law and was liable  to  be set  aside.  That so many notes of high denomination  should have been held as part of 628 the cash for so long a time, might be highly suspicious  but decisions  must  be founded on legal testimony  and  not  on suspicion. The question whether the accounts were genuine or not was  a pure  question of fact and a finding that they were  genuine



was binding both on the Revenue and the subject.

JUDGMENT: CIVIL APPELLATE, JURISDICTION: Civil Appeal No. 81 of 1954. Appeal from the judgment and order dated the 10th March 1953 of  the Bombay High Court in Income-tax Reference No. 35  of 1952. B.   J. Kolah and I. N. Shroff for the appellant. G.   N.  Joshi,  Porus  A. Mehta and R. H.  Dhebar  for  the respondent. 1956.  May 10.  The following Judgments were delivered. BHAGWATI  J.-Two questions were referred by  the  Income-tax Appellate Tribunal to the High Court of Bombay under section 66(1) of the Indian Income-tax Act. (1)  Whether there is any material to justify the assessment of  Rs. 30,000 (Rupees thirty thousand) from out of the  sum of Rs. 61,000 (Rupees sixtyone thousand) (for Income-tax and Excess  Profits  Tax  and  Business  Profits  Tax  purposes) representing the value of high denomination notes which were encashed on the eighteenth day of January one thousand  nine hundred and forty six, and (2)  Whether  in  any event by reason of the orders  of  the Revenue  Authorities not having found *at the  alleged  item was from alleged undisclosed business profits the assessment of  Rs. 30,000 (Rupees thirty thousand) is in law  justified for Excess Profits Tax and Business Profits Tax purposes? The   High  Court  answered  the  first  question   in   the affirmative but refused to answer the second question, being of the opinion that even though it had asked the Tribunal to refer that question under section 66 (2) of the Act, it  had no jurisdiction to do so inasmuch as the appellants had  not asked the Tribunal to refer 629 the second question and, therefore, no question arose of the Tribunal refusing to raise that question or to submit it for the decision of the High Court. The appellants area partnership firm doing business in  Mill Stores at Ahmedabad.  Their head office is in Ahmedabad  and their  branch office is in Bombay.  The Governor-General  on 12th  January  1946 promulgated the High  Denomination  Bank Notes (Demonetisation) Ordinance, 1946 and High Denomination Bank  Notes ceased to be legal tender on the expiry of  12th day of January 1946.  Pursuant to clause 6 of the  Ordinance the   appellants   on  18th  January  1946   encashed   high denomination  notes of Rs. 1,000 each of the face  value  of Rs. 6-1,000.  This was done in the calendar year 1946  being the account year corresponding with assessment year 1947-48. During  the assessment proceedings for the year 1947-48  the Income-tax  Officer called upon the appellant to prove  from whom and when the said high denomination notes of Rs. 61,000 were  received by the appellants and also the bona fides  of the previous owners thereof.  After examining the entries in the  books of account of the appellants and the position  of the  Cash Balances on various dates from 20th December  1945 to  18th  January  1946 and the nature  and  extent  of  the receipts  and  payments  during  the  relevant  period,  the Income-tax  Officer came to the conclusion that in order  to sustain  the contention of the appellants he would  have  to presume  that there were 18 high denomination notes  of  Rs. 1,000 each in the Cash Balance on 1st January 1946 and  that all  cash  receipts after 1st January 1946 and  before  13th January  1946 were received in currency notes of  Rs.  1,000 each, a presumption which he found impossible to make in the



absence  of any evidence.  He, therefore, added the  sum  of Rs.  61,000 to the assessable income of the appellants  from undisclosed sources. On  appeal  to  the  Appellate  Assistant  Commissioner  the appellants  produced before him affidavits of three  persons to show that the appellants had received Rs. 20,000 in 1,000 rupees currency notes on 28th                             630 December 1945, Rs. 15,000 in 1,000 rupees currency notes  on 6th  January  1946 and Rs. 8,500 in  1,000  rupees  currency notes   (making  Rs.  8,000)  on  8th  January  1946,   thus aggregating  to Rs. 43,500 during the relevant period.   The Appellate,   Assistant  Commissioner  did  not  accept   the statements  contained in the said affidavits  and  dismissed the  appeal  and  confirmed  the  order  of  the  Income-tax Officer. An appeal was taken by the appellants before the  Income-tax Appellate   Tribunal.   The  Tribunal  after   taking   into consideration all the materials which bad been placed before the  Appellate  Assistant Commissioner, including  the  said affidavits, was of the opinion that if it was to accept  the appellants’ contention, it would mean that practically every payment  above Rs. 1,000 was received by the  appellants  in high  denomination notes, which was almost impossible.   The Tribunal  could  not  say that the appellants  bad  no  high denomination  notes  with them.  It accepted  the  books  of account of the appellants but thought that the cash  balance on   18th  January  1946  could  not  have   sixtyone   high denomination  notes.   It came to the  conclusion  that  the appellants  appeared to have put in high denomination  notes in  the  cash balance and taken the other  notes  away.   It accepted  the appellants’ explanation only in regard  to  31 notes  and directed that the appellants’ assessment for  the year under reference be reduced by that amount and dismissed the rest of the appeal. The  appellants applied to the Tribunal for stating  a  case and  referring the first question of law to the  High  Court for  its  opinion  under section 66(1) of  the  Act.  -  The Tribunal  rejected  the  said application  holding  that  no question  of  law  arose from  its  order.   The  appellants thereupon  applied to the High Court under section 66(2)  of the Act for an order directing the Tribunal to state a  case and  refer  the questions set out in the  application.   The High  Court directed the Tribunal to state a case and  refer the  two questions of law set out hereinabove to it for  its decision  under  section 66(2) of the Act.  In  stating  the case and referring the said questions of law to the High 631 Court, the Tribunal pointed out that the second question was not urged before the Tribunal at any stage and hence it  was not dealt with by it in its original order. The reference was heard by the High Court and the High Court answered the first referred question in the affirmative, but did not answer the second referred question.  The High Court held  that there were materials before the Tribunal to  hold that  the  sum of Rs. 30,000 represented the income  of  the appellants from undisclosed sources and that the finding  of the Tribunal was a finding of fact based on materials before it  and even if it was an inference drawn by  the  Tribunal, the  inference was based on the facts and  materials  before the   Tribunal.   The  High  Court  observed  that  it   was impossible  to say that the inference drawn by the  Tribunal from  the circumstances was an unreasonable inference or  an arbitrary and capricious inference or an inference which  no judicial tribunal could ever draw.  It, therefore,  answered



the first referred question in the affirmative. As regards the second referred question, the High Court held that  question  was not raised by the  appellants  in  their application  for  reference under section 66(1) of  the  Act and,  therefore, it bad no jurisdiction to ask the  Tribunal to  state a case on a particular question of law, where  the appellants themselves had never asked the Tribunal to  refer such  a question to the High Court and that even  though  it had  directed the Tribunal under section 66(2) to refer  the said question, as it had no jurisdiction to ask the Tribunal to refer the said question, it was not open to it to  answer the second question which had been raised by the Tribunal at its instance and refused to answer it. On a petition made by the appellants for leave to appeal  to this  court, the High Court granted a certificate that  this was  a  fit  case for appeal to this court  and  hence  this appeal. It may be mentioned at the outset that the assessment of the appellants by the Income-tax Officer was under section 23(3) and section 26-A of the Act.  The 632 books  of  account of the appellants were  accepted  by  the Income-tax Officer and the only scrutiny made by the Income- tax Officer was whether at the relevant date,     i.e.    on 12th January 1946, the appellants had in their    cash    61 -notes of high denomination of Rs. 1,000 each.    The   cash book entries from 20th December 1945 up to 18th January 1946 were  put in before the Income-tax Officer and  they  showed that on 28th December 1945 Rs. 20,000 were received from the Anand  Textiles,  and there was an opening  balance  of  Rs. 18,395 on 2nd January 1946.  Rs. 15,000 were received by the appellants on 7th January 1946 from the Sushico Textiles and Rs.  8,500  were received by them on 8th January  1946  from Manihen,  widow of Shah Maneklal Nihalchand.  Various  other sums  were also received by the appellants from 2nd  January 1946 up to and inclusive of 1 1 th January 1946, which  were either  multiples  of Rs. 1,000 or were over Rs.  1,000  and were  thus capable of having been paid to the appellants  in high  denomination  notes of Rs. 1,000.  There  was  a  cash balance  of  Rs.  69,891-2-6 with  the  appellants  on  12th January   1946,  when  the  High  Denomination  Bank   Notes (Demonetisation)  Ordinance 1946 was promulgated and it  was the  case  of  the appellants that they had  then  in  their custody  and  possession 61 high denomination notes  of  Rs. 13000, which they encashed through the Eastern Bank, on 18th January  1946.   The appellants further  sought  to  support their contention by procuring before the Appellate Assistant Commissioner  the  affidavits  of  Kuthpady  Shyama  Shetty, General Manager of Messrs Shree Anand Textiles, in regard to payment  to the appellant is of a sum of Rs. 20,000  in  Rs. 1,000  currency  notes on 28th December  1945,  Govindprasad Ramjivan Nivetia, proprietor of Messrs Shusiko Textiles,  in regard  to payment to the appellants of a sum of Rs.  15,000 in  Rs.  1,000 currency notes on 6th January  1946  and  Bai Maniben,  widow  of Shah Maneklal Nihalchand, in  regard  to payment  to the appellants of a sum of Rs. 8,500 (Rs.  8,000 thereout  being in Rs. 1,000 currency notes) on 8th  January 1946.  The appellants were not in a position to give further 633 particulars  of  Rs. 1,000 currency notes received  by  them during the relevant period, as they were not in the habit of noting  these particulars in their cash book -and  therefore relied  upon  the position as it could be spelt out  of  the entries in their cash book coupled with these affidavits  in order  to show that on 12th January 1946 they had  in  their



cash  balance  of Rs. 69,891-2-6, the 61  high  denomination currency  notes  of Rs. 1,000 each, which they  encashed  on 18th January 1946 through the Eastern Bank.  Both  the  Income-tax Officer and the  Appellate  Assistant Commissioner  discounted this suggestion of -the  appellants by holding that it was impossible that the appellants had on hand on 12th January 1946, the 61 high denomination currency notes  of Rs. 1,000 each, included in their cash balance  of Rs. 69,891-2-6.  The calculations., which they made involved taking into account all payments received by the  appellants from and after 2nd January 1946, which were either multiples of  Rs.  1,000  or were over Rs. 1,000.  There  was  a  cash balance of Rs. 18,395-6-6 on band on 2nd January 1946, which could  have  accounted for 18 such  notes.   The  appellants received thereafter as shown in their cash book several sums of monies aggregating to over Rs. 45,000 in multiples of Rs. 1,000  or  sums over Rs. 1,000, which could account  for  45 other  notes  of that high denomination, thus making  up  63 currency  notes  of the high denomination of Rs.  1,000  and these  61  currency  notes  of Rs.  1,000  each,  which  the appellants encashed on 18th January 1946 could as well  have been  in  their  custody on 12th January  1946.   This  was, however,  considered  impossible  by  both  the   Income-tax Officer  and  the Appellate Assistant Commissioner  as  they could not consider it within the bounds of possibility  that each and every .payment received by the appellants after 2nd January 1946 in multiples of Rs. 1,000 or over Rs. 1,000 was received by the appellants in high denomination notes of Rs. 1,000 each.’ It was by reason of their visualisation of such an   impossibility  that  they  negatived  the   appellants’ contention. It has to be noted, however, that beyond there 82 634 calculations of figures, no further scrutiny was made by the Income-tax  Officer or the Appellate Assistant  Commissioner of the entries in the cash book of the appellants.  The cash book  of  the  appellants was  raccepted  and  the  entries therein  were  not  challenged.   No  further  documents  or vouchers  in relation to those entries were called for,  nor was  the presence of the deponents of the  three  affidavits considered  necessary by either party.  The appellants  took it  that  the affidavits of these parties  were  enough  and neither  the  Appellate  Assistant  Commissioner,  nor   the Incometax  Officer,  who was present at the hearing  of  the appeal   before   the  Appellate   Assistant   Commissioner, considered it necessary to call for them in order to  cross- examine  them with reference to the statements made by  them in their a affidavits.  Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book  entries or the statements made by those  deponents  in their affidavits. This  being  the position, the state of affairs, as  it  ob- tained  on  12th  January 1946, had got to  be  appreciated, having,  regard to those entries in the cash books  and  the affidavits    filed   before   the    Appellate    Assistant Commissioner, taking them at their face value.  The  entries in the cash books disclosed that, taking the number of  high denomination notes at 18 on 2nd January 1946, there came  in the  custody  or  possession of  the  appellants  after  2nd January  1946 and up to 12th January 1946, 49 further  notes of  that  high  denomination, making 67 such  notes  in  the aggregate,  out of which 61 such notes could be encashed  by the  appellants  on 18th January 1946  through  the  Eastern Bank.   A mere calculation of the nature indulged in by  the



Income  tax Officer or the Appellate Assistant  Commissioner was  not enough, without any further scrutiny,  to  dislodge the  position  taken up by the appellants, supported  as  it was, by the entries in the cash book and the affidavits  put in   by  the  appellants  before  the  Appellate   Assistant Commissioner. The Tribunal also fell into the same error.  It could 635 not  negative  the  possibility of the  appellant  being  in possession  of  a  substantial number of  these  high  deno- mination  currency notes.  It, however, considered  that  it was impossible for the appellants to have bad 61 such  notes in the cash balance in their hands on 12th January 1946  and then it applied a rule of the thumb treating 31 out of  such 61  notes as within the bounds of possibility, excluding  30 such  notes  as  not  covered  by  the  explanation  of  the appellants.  This was pure surmise and had no basis in  -the evidence, which was on the record of the proceedings. The  High  Court treated this finding of the Tribunal  as  a mere  finding of fact.  The position in regard to  all  such findings  of fact, as to whether they can be  questioned  in appeal,  is thus laid down by the House of Lords in  Cameron v. Prendergast (Inspector of Taxes) (1): "Inferences  from  facts  stated by  the  Commissioners  are matters  of law and can be questioned on appeal.   The  same remark is true as to the construction of documents.  If  the Commissioners state the evidence and hold upon that evidence that  certain  results follow, it is open to  the  Court  to differ from such a holding". To  the  same effect are the observations of  the  House  of Lords in Bomford v. Osborne (H.  M. Inspector of Taxes) (2): "No  doubt  there  are many cases  in  which  Commissioners, having had proved or admitted before them a series of facts, may   deduce   therefrom  further  conclusions   which   are themselves conclusions of pure fact.  But in such cases  the determination  in point of law is that the facts  proved  or admitted  provide  evidence to  support  the  Commissioners’ conclusions".   The  latest pronouncement of  the  House  of Lords on this question is to be found in Edwards  (Inspector of  Taxes)  v. Bairstow and  Another(3).   Viscount  Simonds observed at page 586:- "For it is universally conceded that, though it is (1) [1940]8I.T.R.(Suppl.)75,81. (2) [1942] 10 I.T.R. (Suppl.) 27, 34. (3) [1955] 28 I.T.R. 579. 636 a pure finding of fact, it may be set aside on grounds which have  been stated in various ways but are, I  think,  fairly summarised by saying that the court should take that  course if it appears that the Commissioners have acted without  any evidence  or  upon  a  view of the  facts  which  could  not reasonably be entertained". and Lord Radcliffe expressed himself as under at page 592:- "If the case contains anything ex facie which is bad law and which  bears  upon  the  determination,  it  is,   obviously erroneous   in  point  of  law.   But,  without   any   such misconception  appearing ex facie, it may be that the  facts found are such that no person acting judicially and properly instructed  as  to the relevant law could have come  to  the determination  under appeal.  In those  circumstances,  too, the court must intervene". It  follows,  therefore, that facts proved or  admitted  may provide  evidence  to  support  further  conclusions  to  be deduced  from  them,  which conclusions  may  themselves  be conclusions of fact and such inferences from facts proved or



admitted  could  be  matters of law.   The  court  would  be entitled  to intervene if it appears that the  fact  finding authority  has acted without any evidence or upon a view  of the facts, which could not reasonably be entertained or  the facts  found are such that no person acting  judicially  and properly  instructed as to the relevant law would have  come to the determination in question. The  High Court recognised this position in effect but  went wrong  in applying the true principles of interference  with such  findings  of fact to the present  case.   The  attempt which  was made by the High Court to probe into the mind  of the   Tribunal  by  trying  to  discard  the  affidavit   of Govindprasad  Ramjivan Nivetia in regard to the  payment  of Rs.  15,000  to the appellants in 15 currency notes  of  Rs. 1,000 each on 6th January 1946 and thus reducing the  aggre- gate  sum  of Rs. 43,500 to Rs. 28,500  and  justifying  the figure  of Rs. 31,000 arrived at by the Tribunal was  really far-fetched and contrary to the terms of 637 the  tribunal’ s order itself,the Tribunal not having  given any  inkling, whatever, of what was at the back of its  mind when  it fixed upon the figure Rs. 31,000.  Really  speaking the  Tribunal had not indicated upon what material  it  held that  Rs.  30,000  should be treated  as  secret  profit  or profits from undisclosed sources and the order passed by  it was   bad.   The  appellants  had  furnished  a   reasonable explanation  for  the possession of  the  high  denomination notes  of  the  face value of Rs. 61,000 and  there  was  no justification  for having accepted it in part and  discarded it  in  relation  to  a sum of Rs.  30,000.   The  case  was analogous to the one before the Patna High Court in Chunilal Ticamchand  Coal  Co. Ltd. v.  Commissioner  of  Income-tax, Bihar  and Orissa(1) and should have been similarly  decided in favour of the appellants. For the reasons indicated above, we are of the opinion  that the High Court was in error in answering the first  referred question  in the affirmative.  It ought to have answered  it in  the  negative and held that there were no  materials  to justify the assessment of Rs. 30,000 from out of the sum  of Rs.  61,000,  for  Income-tax and  Excess  Profits  Tax  and Business  Profit Tax purposes representing the value of  the high -denomination notes which were encashed on 18th January 1946. In  view of the above it is not necessary for us to go  into the  question whether the High Court ought to have  answered the second referred question also.  The answer to the  first referred question being in the’ negative, the very basis for Excess  Profits Tax and Business Profits Tax disappears  and the second referred question becomes purely academical. The result, therefore, is that the appeal is allowed and the first  referred question is answered in the  negative.   The appellants will have their costs here as well as in the High Court. VIMNKATARAMA  AYYAR J.-I agree to the order  just  proposed; but I prefer to rest my decision on the (1)  [1955] 27 I.T.R. 602. 638 ground   that  the  finding  of  the  Tribunal   that   high denomination  notes of the value of Rs.  30,000  represented the concealed* profits of the appellant is not supported  by any evidence, and is, in consequence, erroneous in point  of law and liable to be set aside.  The evidence on record  has been  exhaustively reviewed in the judgment just  delivered, and there is no need to traverse the same ground again.   To put the matter in anut-shell, the accounts of the  appellant



have  been  accepted by the Tribunal as genuine, and  it  is impossible  to  say, having regard to the  cash  balance  as shown  therein,  that the notes in question could  not  have been  included  therein.  The Tribunal observes that  it  is unlikely  that  so many high denomination notes  would  have been  held  as  part of the cash on hand for  such  a  large number  of days.  That, no doubt, is highly suspicious;  but the decision of the Tribunal must rest not on suspicion  but on  legal  testimony.  For the respondent,  Mr.  Joshi  con. tended that the cash balance shown in the books could not be accepted  as true, because the appellant had ample  time  to rewrite  the accounts, as the Ordinance was issued  on  12th January 1946 and the year of account of the assessee was the Calendar year.  Whether the accounts are genuine or not is a pure  question of fact, and a finding on a question of  fact is as much binding on the Revenue as on the subject. 639