Law: Income Tax Act, 1961

Section: 256

Income-tax-Reference---Income from undisclosed sources---Addition of amounts withdrawn by directors of assessee-company from its accounts---Finding by Tribunal that amounts had been re-deposited---Tribunal justified in deleting additions to income---No question of law arose---Indian Income Tax Act, 1961,S.256. Held, rejecting the application of directing reference, that, in the instant case, the Assessing Officer had made additions to the income of the assessee-company on the ground that amounts had been withdrawn by its directors from its accounts from time to time. The Tribunal after examining the imprest accounts of the directors/relatives from the assessment year 1989-90 to the assessment year 1994-95 observed that the said practice was being followed by the assessee in the past years as well as in the subsequent years but no such addition was ever made in any of the years. The Tribunal further noticed that even according to the Departmental Representative the existing debit balance in the imprest accounts was adequate to cover the credits on any one date in the said imprest accounts, meaning thereby that the directors re-deposited the amount either wholly or partly with the company out of the withdrawals of the money made by them from the assessee by debiting the same in the respective imprest accounts. The Tribunal accordingly held that the Revenue had failed to prove that the amounts withdrawn by the directors by debiting their respective imprest accounts were spent for some other purposes and the same were not available with them for re-depositing with the bank. The findings recorded by the Tribunal, based on the material available before it were pure findings of fact, which were not sought to be challenged by the Revenue. The Tribunal was justified in deleting the addition of Rs.11,74,000. No question of law arose from its order. THIS JUDGMENT DELIVERED BY: By this application under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), the Revenue seeks a mandamus to the Income-tax Appellate Tribunal to refer the following question to this Court for opinion; "Whether, on the facts and in the circumstances of the case, the Income-tax…

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