MESSRS MEHTA PARIKH & CO. vs THE COMMISSIONER OF INCOME-TAX,BOMBAY.

The Supreme Court held that under Sections 23(3) and 26-A of the Income-tax Act, the findings of the Income-tax Officer and the Appellate Assistant Commissioner regarding the possession of currency notes were based on no evidence. The Court established that while conclusions based on proved facts may be factual, the legitimacy of inferences drawn from those facts can be a question of law. The High Court's refusal to interfere with the Tribunal's finding was erroneous, leading to the appeal's success.