COMMISSIONER OF INCOME TAX Vs. ARVIND H SHAH

JUDGEMENT

(1.) THE CIT, Gujarat III, Ahmedabad, by this application under S. 256(2) of the IT Act 1961 requires us to direct the Tribunal, Ahmedabad Bench B, to submit the statement of case and refer the following question said to be a question of law arising out of order made by the Tribunal in ITA 4547/Ahd/1992 for the asst. year 1987 88 in case of respondent assessee :

(2.) THE facts giving rise to this application as emerging from the material produced before us are that a search was carried out at the residential premises of the assessee on 14th Oct., 1986, during the course of which three promissory notes executed by Vinay Corporation in favour of the assessee were found. The three promissory notes are of the denomination of Rs. 50,000, 1 lac and 1 lac. The AO found that promissory note of Rs. 50,000 was bearing the date of 2nd June, 1982, and did not relate to the asst. year 1987 88 with which this application is concerned. However, it was of the opinion that from the other two promissory notes it was not possible to discern the date of their execution and having regard to the fact that search took place during the financial year 1986 87 the amount represented by the two promissory notes Rs. 2 lacs was brought to the tax by making additions in the income of the assessee for the asst. year 1987 88. The plea of the assessee had been that he had earlier made a declaration under the Amnesty Scheme declaring his undisclosed income between 1975 to 1979. The AO found that the declaration of the assessee under the Amnesty Scheme was not accepted and he, therefore, brought the amount represented by the two promissory notes and interest accrued thereon to tax.

(3.) FROM the aforesaid facts it is apparent that the deletion of addition of Rs. 2 lacs has been founded on the finding of fact that the promissory notes were executed somewhere in 1982 and the income represented by these promissory notes had been already subjected to tax for the assessment in the asst. year 1983 84. These findings do not give rise to any question of law. So also the disallowance of Rs. 24,000 on the supposed accrued income on the amount of promissory notes has been deleted on the ground that the assessee is not maintaining his accounts on mercantile system, therefore, the income arising from the investment made in the Panchnama should be taxed on the basis of actual receipts only also do not give rise to any question of law as the primary findings on the basis of which the answer depends is a finding of fact.