COMMISSIONER OF INCOME TAX Vs. C L VERMA

JUDGEMENT

(1.) THE Revenue has approached this Court to call for reference under S. 256 (2) of the IT Act, 1961 ('the Act') in respect of the following questions"

(2.) IN the course of assessment proceedings, the assessee was not able to produce direct evidence in support of his explanation regarding a sum of Rs. 34,200 paid to one Tejram, allegedly to meet the farm expenses. The AO wanted Tejram to be produced and examined. In view of this failure, the ITO added this sum as the income of the assessee. Thereafter penalty proceedings were initiated under S. 271 (1) (c) of the Act.

(3.) THE Revenue contended before the Tribunal that evidence produced in the penalty proceedings cannot be looked into in the assessment proceedings. The Tribunal did not accept this contention. The Revenue contends that the order of the Tribunal is vitiated by its reliance on an inadmissible material.