LAXMI ICE FACTORY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(2) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for the opinion to this court :

(2.) Briefly stated the facts giving rise to the present reference are as follows : The present reference relates to the assessment years 1976-77 and 1977-78. The applicant is a firm consisting of three persons, namely, Smt. Lilawati Narang, Shri V. P. Narang and Sri R. K. Narang. During the course of the assessment proceedings for the assessment year 1976-77 the Income-tax Officer raised the following query vide letter dated November 23, 1978 :

(3.) The applicant vide letter dated November 24, 1978 replied as follows :