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High CourtsDivision Bench(1988) 08 MP CK 0035

New Calcutta Hardware Mart vs Commissioner of Income Tax

Madhya Pradesh High Court · Decided on 5 August 1988 · Citation: (1988) 73 CTR 102 : (1989) 175 ITR 292 : (1988) 40 TAXMAN 233

HON’BLE JUDGES
G.G.Sohani, Acting C.J. · R.K. Verma, J
CASE NUMBER
Miscellaneous Civil Case No. 145 of 1987
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Judgment

7 paragraphs · 346 words

G.G. Sohani, Actg. C.J.

1.

This is an application u/s 256(2) of the Income-Lax Act, 1961 (hereinafter referred to as "the Act").

2.

The material facts giving rise to this application, briefly, are as follows :

The assessee is assessed in the status of a registered firm. While framing the assessment of the assessee for the assessment year 1975-76, the Income Tax Officer held that certain cash credits were not satisfactorily explained by the assessee. In this view of the matter, the sums so credited were added to the income of the assessee by the Income Tax Officer as income from undisclosed sources. On appeal, the Commissioner of Income Tax (Appeals) deleted those additions. Aggrieved by the order passed by the Commissioner of Income Tax (Appeals), the Revenue preferred an appeal before the Tribunal. The Tribunal held that the capacity of Shri Bherulal and Shri Shyamlal who were alleged to have advanced the amount of Rs. 35,000 and Rs. 20,000 to the assessee was not proved. The Tribunal, therefore, set aside the order passed by the Commissioner of income tax (Appeals) in that behalf. Aggrieved by the order passed by the Tribunal, the assessee sought a reference, but, as the application submitted in that behalf was rejected, the assessee has filed this application.

3.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the cash credit amounting to Rs. 55,000 was the income of the assessee as the assessee had failed to prove the capacity of the creditors, Shri Bherulal and Shyamlal, to advance the amounts of Rs. 35,000 and Rs. 20,000, respectively ?"

4.

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties shall bear their own costs of this reference.