COMMISSIONER OF INCOME TAX Vs. INDIRA RANI B

JUDGEMENT

(1.) BOTH these petitions under Section 256(2) of the Income-tax Act, 1961, relate to the assessment made on one Indira Rani for the assessment year 1983-84. Though the assessee filed a return of income of Rs, 3,793, it was subsequently revised disclosing an income of Rs. 5,71,984. The Income-tax Officer completed the assessment enhancing the income to Rs. 15,57,040 making an addition of Rs. 9,79,829 as income from other sources besides unexplained investment in the purchase of a car of Rs. 70,000 and subscription to a chitty of Rs. 10,281. The assessee disputed this addition in appeal before the Commissioner of Income-tax who allowed it in part, deleting an amount of Rs. 1,46,497 out of the income added under the head "Other sources", but sustaining the assessment in other respects. On further appeal to the Tribunal by the assessee, the Tribunal while sustaining the additions relating to the investments on the car and the chitty, deleted the entirety of the addition made under the head "Other sources". The Revenue has filed Original Petition No. 6628 of 1991 against the deletion under the head "Other sources" made by the Tribunal, while the assessee challenges the sustaining of the additions relating to car and chitty by the Tribunal. The reference applications filed by both sides were dismissed by the Tribunal as not disclosing any question of law and these two petitions are therefore filed under Section 256(2) to compel reference of the very same questions.

(2.) THE assessee's father was an abkari contractor who was a partner of the firm, DKB and Co., who had substantial abkari dealings. This firm had offered an amount of Rs. 41,00,000 for assessment during the period in question and that had been brought to assessment in the hands of that firm. THE amount sought to be added under the head "Other sources" to the assessee's income pertained substantially to the amount deposited in her bank account in the Federal Bank, Quilon branch, in which a deposit of Rs. 7,60,276 was made on March 30, 1983. THE assessee's explanation was that this amount belonged to her father, Bharathan, who was a partner of the firm DKB and Co. According to her, Bharathan had a substantial share in the income of the firm and had been depositing the money in various names. THE deposit in question was one such. THE Tribunal accepted this plea of the assessee and it was on that basis that the Tribunal deleted the entirety of the addition made under the head "Other sources".

(3.) IN the course of the discussion, the Tribunal had observed that the assessment of Rs. 41 lakhs in the hands of DKB and Co. had been accepted and that no appeal had been filed by the firm, DKB and Co., therefrom. Counsel for the Revenue pointed out that the statement that no appeal had been filed was a mistake since an appeal had, as a matter of fact, been filed by the assessee. According to counsel for the Revenue, it was this mistaken belief that no appeal had been filed that had prompted the Tribunal to reach the conclusion that the deposit in question belonged to the assessee's father and not herself. But we are not in a position to agree with counsel on this submission. The Tribunal has discussed this question very elaborately from paragraph 18 onwards. We do not find that the alleged non-filing of the appeal by DKB and Co. has influenced the Tribunal in its decision that the amount belonged to Bharathan and not to the assessee. Even otherwise, it was pointed out by counsel for the assessee before us that the Tribunal had in its order in INcome-tax Appeals Nos. 992 of 1986 and 858 of 1988 relating to the assessment of DKB and Co., for the year 1983-84, affirmed the assessment made on that firm on the amount of Rs. 41 lakhs offered by it for assessment. Counsel also referred to the assessment made On DKB and Co. for the year 1986-87 where the INcome-tax Officer had accepted the position that an amount of Rs. 9,35,236, namely, the amount deposited in the Federal Bank, as mentioned earlier, and another had been utilised by the assessee and was not available to DKB and Co., for payment of over Rs. 11 lakhs of income-tax during the year. Having regard to all these circumstances, we do not find any purpose in compelling reference to this court in relation to the deletion of the income under the head "Other sources". So far as the assessee's petition Original Petition No. 6702 of 1991 is concerned, we do not find any merit in it. The petition was pressed only in relation to the amount of Rs. 70,000 utilised for the purchase of the car. According to the assessee, the car had been purchased with funds furnished by her mother. It was stated that both the mother and the daughter-assessee had undisclosed sources of income and the mother had, in the course of the assessment proceedings, accepted that she had furnished the amount of Rs. 70,000 for purchase of the car. The Tribunal has found as a fact that this cannot be true. The Tribunal noted that apart from the mother's statement accepting the advancement of the amount for purchase of the car, there was no other evidence to show that the mother had actually ' advanced any amount or that she had even any source of funds for providing the advance. It was also noted that the assessee had transferred the car subsequently to her own business, The finding that the amount of Rs. 70,000 belonged to the assessee and had not been advanced by the mother is again a question of fact on which all the authorities have concurrently found against the assessee on an appreciation of the evidence in the case. No question of law arises for reference in that case as well.