COMMISSIONER OF INCOME TAX Vs. POPULAR AUTOMOBILES

JUDGEMENT

(1.) PURSUANT to the direction given by this court in O. P. No. 3020 of 1993, the following questions have been referred for opinion under Section 256(2) of the Income-tax Act, 1961 (in short "the Act") :

(2.) THE background facts necessary for adjudication of questions as referred to by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal"), are as follows : THE assessee is a partnership firm. For the assessment year 1987-88, its previous year ended on April 30, 1986, in the profit and loss account originally filed along with a return of income for the said assessment year, three items were found debited as relating to income declared in the returns filed under the amnesty scheme for the previous years ending on April 30, 1983, April 30, 1984 and April 30, 1985, totalling Rs. 52,66,963 and the net profit was transferred to the appropriation account for the purpose of computing the total income. THE Assessing Officer took the net profit as per account and added the aforesaid sum of Rs. 52,66,963 which was debited in the profit and loss account. THE reasons indicated by the Assessing Officer for making such addition are as follows :

(3.) WITH reference to the materials on record more particularly the format in which the declaration for the amnesty scheme was to be given, it was observed that the assessee was entitled to deletion of the addition made by the Revenue authorities.