Law: Income Tax Act, 1922

Section: 66(2)

Income Tax Act, 1922 -- Section 13, 66 -- Cash credits -- Reference to High Court -- Question of fact or law -- Question whether certain amount shown as credit balance in the account books of the assessee represented income of the assessee -- Whether patently a question of fact -- Held yes Corresponding Sections: Income-tax Ordinance, 1979 -- Section 32(1), 136(1) -- ORDER [ANWARUL HAQ, J.].-- The petitioner-firm functioning under the name and style of M/s. Muhammad Akbar Muhammad Afzal and dealing in fruit is aggrieved by the refusal of the Lahore High Court to require a reference under Section 66(2) of the Income Tax Act, 1922, for the assessment year 1959-60. The relevant facts are that in the return submitted by the firm for the year in question sum of Rs. 20,000 was shown as credit balance in the name of Muhammad Younis Kelawala, on account of the sale proceeds of goods sent by the said Muhammad Younis on behalf of his father to this Company. In elaboration of this statement it is stated by the learned counsel for the petitioner that Wilayat Ali, the father of Muhammad Younis Kelawala, used to send bananas from Dacca to Lahore, and his son, Younis, used to export them to India, and that in this connection Wilayat Ali was even convicted for a violation of the Foreign Exchange Regulations. The question before the Income Tax Officer was whether Muhammad Younis Kelawala was acting on behalf of the petitioner-firm and, therefore, the sum of Rs. 30,000 standing to his credit in the accounts of the company in fact represented the income of the Company itself, or whether the said Muhammad Younis was acting on behalf of his father, Wilayat Ali, and therefore, this amount of money was nothing more than the sale proceeds of goods sent to the firm and sold by it on his behalf. The Income Tax Officer, after considering the material placed before him, came to the conclusion that…

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