Nirmaldas Jassumal vs Commissioner of Income Tax

G.G. Sohani, J.—This is an application u/s 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act ").

The material facts giving rise to this application, briefly, are as follows : The applicant is a registered partnership firm carrying on business at Indore. While framing the assessment of the assessee for the assessment year 1978-79, the Income Tax Officer held that the sum of Rs. 35,000 creditedin the account of Smt. Shilabai, wife of Parasram, one of the partners, was not satisfactorily explained and the amount was, therefore, includible in the income of the assessee. Aggrieved by that order, the assessee preferred an appeal before the Appellate Assistant Commissioner, who allowed the appeal. On further appeal by the Revenue before the Income Tax Appellate Tribunal, Indore Bench, the Tribunal set aside the order passed by the Appellate Assistant Commissioner and held that the Income Tax Officer had rightly taxed the sum in question as the assessee''s income u/s 68 of the Act. The application for making a reference submitted by the assessee was rejected. Hence, the assessee has filed this application.

Learned counsel for the applicant contended that the finding of the Tribunal that the cash credit in question represented the undisclosed income of the assessee was based on surmises and conjectures and was arrived at by failing to take into consideration the relevant material and the circular of the Board, In reply, learned counsel for the Revenue contended that no question of law arose out of the order passed by the Tribunal.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise in this case :

"Whether, on the facts and in the circumstances of the case, there was material before the Income Tax Appellate Tribunal for holding that the sum of Rs. 35,000 credited in the account of Smt. Shilubai represented the income of the assessee for the assessment year 1978-79 from undisclosed sources ?"

The application is accordingly 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, the parties shall bear their own costs of this application.