COMMISSIONER OF INCOME TAX Vs. TARA SINGH

JUDGEMENT

(1.) THIS common order shall govern the disposal of two IT references, namely, IT Ref. No. 174 of 1985 and IT Ref. No. 211 of 1985 arising out of two different assessment years though in respect of the same assessee and on the same facts and law. The questions referred for the opinion of the High Court are : Asst. year 1973 -74 (IT Ref. No. 211 of 1985) :

(2.) THE assessee, S. Tara Singh, is one of the directors of Green Finance India (P) Ltd. There stood a certain debit balance in the books of the company against the assessee and the ITO formed an opinion that the assessee shall be deemed to have derived benefit from the company assessable to tax within the meaning of S. 2(24)(iv) of the Act. The value of such benefit was added to the income of the assessee.

(3.) THE AAC deleted the addition in the appeal preferred by the assessee. The Revenue went in appeal to the Tribunal which has been dismissed. Learned counsel for the Revenue has relied on the Division Bench decision of the Madras High Court in Addl. CIT vs. Late A.K. Lakshmi 1978 CTR (Mad) 171 : (1978) 113 ITR 368 (Mad) : TC 58R.480. The facts of the case bear a close resemblance to the fact of the case at hand. During the course of its judgment, the Division Bench has observed :