Law: Income Tax Act, 1961

Section: 68

Income-tax-- ----Reference---Income from undisclosed sources---Cash credits--­Discrepancies--- Explanation of assessee---Explanation already in the material before I.T.O.---No referable question arises---Indian Income Tax Act, 1961, Ss. 68 & 256. For the assessment year 1982-83, the Income-tax Officer noticed two credit entries in the accounts of the assessee firm with the Bank. In the books of account, there was only one credit of a certain sum. The Income-tax Officer treated the credits as undisclosed income under section 68 of the Income Tax Act; 1961. The assessee contended before the Commissioner of Income Tax that two amounts were withdrawn from its account by cheque and came to be deposited on the same day in another Bank in Calicut. The Commissioner of Income-tax and the Income-tax Appellate Tribunal accepted the assessee's explanation. On an application for a reference by the Department, the Tribunal held that the deposits stood explained, and there was only a clerical mistake in making the entries in the books of account, which too was later on rectified and, therefore, there was no referable question of law. On an application to direct a reference: Held, on the facts; that no referable question of law arose. JUDGMENT V. V. KAMAT, J.---The Revenue prays for a direction for a reference of the following six questions: "(1) Whether, on the facts and in the circumstances of the case and also in the light of the facts narrated in the enclosure to the reference application, the Tribunal is right in law and fact in holding that the order of the Commissioner of Income-tax (Appeals) in deleting the addition was just and warranted? (2) Whether, on the facts and in the circumstances of the case and on a perusal of paragraph 4 of the order of the Commissioner of Income­ tax (Appeals) which shows that the assessee's explanation was that the deposits at Calicut were the withdrawals of partners from the assessee on earlier days, the Tribunal is right in fact and in law in holding that the explanation of the assessee that the amounts were withdrawn from bank account of the assessee on February 18, 1982, and deposited the same at Calicut on the same day was before…

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