COMMISSIONER OF INCOME TAX Vs. USHA JAIN SMT

JUDGEMENT

(1.) IN the present case, the respondent had in her books of account credited one Gupta and Co. with Rs. 48,476 and one S. Surain Singh with Rs. 48,400. The respondent was constructing a building and the cost of material was debited to the said accounts. The ITO came to the conclusion that Gupta and Co. and S. Surain Singh did not exist and that those entries were fictitious. He sought to apply S. 68 of the Act. The CIT (A) came to the conclusion that S. 68 was not applicable and remanded the case to the ITO for investigating further facts as, according to the CIT, if at all, it is only S. 69 or S. 69B or S. 69C which would be applicable. The ITO filed an appeal and the Tribunal held that "s. 68 deals specifically with sums credited in the books of the assessee on account of receipt of money". According to learned counsel for the petitioner, S. 68 refers only to sums being credited in the books of the assessee and does not specifically state that the said section applies only on account of credits being there because of receipt of money. In our opinion, the question involved is a pure question of law as it pertains to the correct interpretation of S. 68. We, therefore, direct the Tribunal to state the case and refer the following question of law to this Court :

(2.) BEFORE concluding, we might mention that learned counsel for the respondent states that the reference is barred by time. We find no merit in this contention. The order of the Tribunal dismissing the application under S. 256(1) is dated May 14, 1986. In para. 24 of the petition under s. 256(2), it is stated that the said order of the Tribunal was received on February 27, 1987. This averment in the petition is supported by an affidavit of the CIT himself. Learned counsel for the respondent contends that it is not possible that an order passed on May 14, 1986, was served only on February 27, 1987. Merely on this conjecture, it is not possible for us to conclude that the order dt. May 14, 1986, was not served on February 27, 1987. The affidavit of the CIT has not been rebutted by the respondent in any way. It was open to the respondent to have placed on record material to show that the service of the order dt May 14, 1986, was or must have been made prior to February 27, 1987. In the absence of any such averment, we see no reason to disbelieve the affidavit of the CIT which supports the averment in the petition to the effect that the said order of the Tribunal was received only on February 27, 1987. In our opinion, the petition has been filed within time. This petition is, accordingly, allowed in the aforesaid terms. There will be no order as to costs.