(1.) AT the instance of the Revenue, under section 256(2) of the Income-tax Act, 1961 (hereafter referred to s "the Act"), the following two questions of law have been referred for the opinion of this court :
(2.) THE assessee is an individual and the reference relates to the assessment year 1955-56. In the course of the assessment proceedings, the Income-tax Officer, found that the assessee e deposited on June 8, 1954, and June 10, 1954, two sums of Rs. 50,000 each, that those amounts were withdrawn on January 29, 1955, and March, 2, 1955, respectively, and advanced to the late Bajranglal Bhuwalka, who introduced the same in the books of Rambilas Nandlal in his own name on the same dates. THE assessee was unable to place any evidence regarding the aforesaid amounts and she also did not maintain any books of account. An inspector was deputed to inspect the accounts of Nathuram Badridas and therefrom, it was seen that the assessee received interest in a sum of Rs. 2,772 and the Income-tax Officer completed the assessment to that best of his judgment on a total income of Rs. 1,02,772. On appeal by the assessee before the Appellate Assistant Commissioner, it was contended that the addition of Rs. 1 lakh was as not warranted as during the course of the assessment year 1953-54, the assessee had already filed a balance-sheet on March 31, 1953, which showed that she had cash in hand of Rs. 1.35 lakhs and, therefore, the investment of Rs. 1 lakh had come out of that cash. It was also further urged before the Appellate Assistant Commissioner that since her marriage in 1940, the assessee came into possession of large cash and the deposit of Rs. 1 lakh had come out of this cash. THE Appellate Assistant Commissioner examined the stand of the assessee so taken and found that the assessee never maintained books of account and he found that the assessee had throughout taken the stand that she had not maintained accounts, and in that context, the balance-sheet as on March 31, 1953, could not be understood as anything but a piece of paper on which something was typed and not supported by the books of account or even a cash book. Referring to the solitary letter produced by the assessee dated December 19, 1968, to the effect that the assessee had large cash in her possession, the Appellate Assistant Commissioner dealt the utter improbability of such a case and concluded that the assessee could not have had in her hand any sum as on March 31, 1953, for deposit in the year in question. In that view, the Appellate Assistant Commissioner dismissed the appeal. In further appeal to the Tribunal, it took the view that the Income-tax Officer could have assessed the amount of Rs. 1 lakh in the hands of he assessee for the assessment year 1953-54 and having omitted to do so, he cannot attempt to assess this amount for the assessment year 1955-56 as income of the assessee from undisclosed sources and in that view, deleted the addition of Rs. 1 lakh. That is how the matter has come up before this court for its opinion on the questions of law referred to earlier.