SUSHILA DEVI SHARMA Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) The Income-tax Appellate Tribunal has referred the following question of law for the opinion of this court:

(2.) The assessee is an individual carrying on the business as the agent of Baidyanath Ayurved Bhawan Private Ltd. While making assessment for the year 1960-61, relevant accounting year for which was the financial year ending 31st March, 1960, the ITO found that the assessee had advanced a loan of Rs. 55,000 to one Banwarilal. When called upon to explain the nature and source of the loan, the assessee explained that in the year 1955, she had given a loan of Rs. 30,000 to one Sri Mangal Datt Shastri who paid it back to her on 4th September, 1959. She sold ornaments worth Rs. 28,298 in the year 1955 and it was from out of the sale proceeds of those ornaments and the money received from Mangal Datt Shastri that she advanced the loan in question to Banwarilal. The ITO did not accept the explanation offered by the assessee and added a sum of Rs. 55,000 to her income as income from some undisclosed source. Being aggrieved, the assessee went up in appeal before the AAC, who accepted the claim of the assessee that she had in the year 1955 advanced a loan of Rs. 30,000 to Mangal Datt Shastri and that she received back the amount on 4th September, 1959, as claimed by her. The source for this much of the amount advanced to Banwarilal, therefore, had been adequately explained. So far as the remaining amount of Rs. 25,000 was concerned, he rejected the assessee's explanation. In the result, he partly allowed the appeal and granted relief to the assessee to the extent of Rs. 30,000.

(3.) Being aggrieved, both the assessee and the department went up in appeal before the Income-tax Appellate Tribunal. The Tribunal accepted the appeal filed by the department and held that the assessee had failed to explain the source of Rs. 30,000, which according to her, she had received from Mangal Datt Shastri. It affirmed the finding of the ITO and the AAC that the assessee had failed to explain the source of the remaining amount of Rs. 25,000. In the result, the appeal filed by the department was allowed and that filed by the assessee was dismissed, and the addition of Rs. 55,000 to the income returned by the assessee, made by the ITO, was upheld. The assessee then obtained orders from this court requiring the Tribunal to state the case and to refer the aforementioned question of law for its opinion.