COMMISSIONER OF INCOME TAX Vs. PRAYAGDASS RAJGARHIA

JUDGEMENT

(1.) IN this reference, the Tribunal, has referred the following question being a question of law to this Court for its opinion, relevant to the asst. year 1971 -72 :

(2.) THE brief facts are that there were accounts in the names of his minor children in the firms of Delhi Paper Industries and Rajindra Paper Mills where he was a partner. The total deposits in these accounts amounted to Rs. 1,30,000. On the view that these deposits were not properly explained but invested there for interest and the interest income was not disclosed, the ITO estimated an income of nine per cent. on these deposits as income accruing to the assessee and brought it to tax in the asst. year 1967 -68 and in each of the subsequent assessment years the ITO went on repeating the same procedure. In the appeals filed against those assessments it was found that the assessee had disclosed these amounts in the voluntary disclosures made to the CIT and in view of the decision of this Court in the case of Rattan Lal vs. ITO (1975) 98 ITR 681, the addition made was deleted and consequently the interest income was also excluded. The Tribunal, following the order passed in the earlier asst. yrs. 1967 -68 to 1970 -71 deleted a similar addition made in the assessment year under reference. Consequently, the application under S. 256(1) of the IT Act was filed by the Revenue, out of which the present reference has arisen.