CIT Vs. PURSOTTAM SA

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Allahabad, has referred the following questions of law under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion of this Court. Whether on the facts and in the circumstances of the case the Hon'ble ITAT is justified in law in holding that the assessee is entitled to deduction under Section 80CCA and 80CCB of the Income Tax Act?

(2.) THE Reference relate to the Assessment Year 1992 -93. Briefly stated, the facts giving rise to the present Reference are as follows:

(3.) IN appeal before the Tribunal, it was stated on behalf of the assessee that the loan of Rs. 2 lakhs was given to M/s. Ganesh Prasad Hira Lal out of amounts available in assessee's Savings Bank A/c. In particular, a reference was made to the credits of Rs. 21,312/ - and Rs. 15,125/ - aggregating Rs. 36,437/ -, which were stated to be on account of interest income. Thus, it was submitted that the loan of Rs. 2 lakhs given to M/s. Ganesh Parasad Hira Lal had a nexus with the assessee's past income and income during the year. It was also stressed that during the year under consideration, the assessee had substantial income. Relying on the decision of the Punjab and Haryana High Court in thea case of Ravi Kumar Mehra v. C.I.T. : 172 ITR 108 and a decision of the Appellate tribunal reported in 57 TTJ 532, it was pleaded that the assessee was eligible for relief under Section 80CCA and 80CCB of the Act. Opposing these submissions, the Department had contended that all the income earned by the assessee during the year was invested elsewhere and that the Savings Bank A/c of the assessee did not in any way show that the amount of Rs. 2 lakhs was advanced to M/s. Ganesh Prasad Hira Lal, out of income chargeable to tax during this year or in earlier year.