Lal Chand vs Commissioner of Income Tax

B.P. Jeevan Reddy, C.J.—By this application u/s 256(2) of the Income Tax Act, 1961, the assessee is seeking to refer the following five questions :

"1. Whether, on the facts and circumstances of the case, the Tribunal is legally justified in upholding the additions of Rs. 2,07,023 towards the value of the jewellery, in the hands of the applicant u/s 69A of the Income Tax Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that there has been no proper explanation as to the nature and source of acquisition of jewellery of the value of Rs. 2,07,025 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the identification of seized jewellery could not be an evidence per se of the ownership of the jewellery ?

Whether, on the facts and circumstances of the case, the Tribunal is legally justified in raising the presumptions u/s 132(4A) against the applicant ?

Whether, on the facts and in circumstances of the case, the Tribunal was legally justified in upholding the inference that the explanation and the evidence were an afterthought ?"

So far as question No. 1 is concerned, it was not raised in the application u/s 256(1) and moreover it is only a general question. It cannot, therefore, be referred.

So far as questions Nos. 2, 3 and 5 are concerned, they relate to the same factual issue, namely, whether a particular jewellery found during the search of the assessee''s premises u/s 132 of the Act belonged to him or to a third party. At the time of search, he or his wife did not give any explanation with respect to the said jewellery. Some days later, they came forward with the story that the said jewellery belonged to one Mrs. Kripal Das, who was related to the assessee. Kripal Das and his wife also corroborated this statement but the authorities refused to accept this version and applied Section 69A. This is a pure finding of fact and there is no reason to refer the said questions.

Question No. 4 raises an alternative contention, namely, that even if the value of the said jewellery is to be included in the income u/s 69A, whether it should be included in the assessee''s income or in his wife''s income. This question, we are satisfied on the facts and circumstances of the case, is one of law and ought to be referred u/s 256(2) of the Act. Accordingly, question No. 4 is referred, but it is reframed in the following terms :

"Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the value of the jewellery in question should be included in the assessee''s assessment and not in his wife''s assessment when the said jewellery is recovered from the room in the possession of the assessee''s wife ?" The application is allowed in part.

Accordingly, question No, 4 shall be stated u/s 256(2) of the Act. No costs.