LAHERCHAND DHANJI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under S. 256(1) of the IT Act, 1961, made at the instance of the assessee, the Income tax Appellate Tribunal ("the Tribunal") has referred the following question of law to this Court for opinion :

(2.) THE assessee is a partnership firm. It has two partners, namely, Dhanji Bhavanji, with 60 per cent share and Girshchandra Dhanji with 40 per cent share. The relevant assessment year is 1972 73. The corresponding accounting year ended on 3rd Aug., 1971. The subject matter of controversy is the addition of a sum of Rs. 25,000 in the assessment of the assessee firm under the head "Income from other sources" by rejecting the explanation of the assessee in regard to the source thereof. The question of law that arises for consideration relates to the powers of the IT authorities to examine the genuineness of the deposit in the firm's books in view of the declaration made by the partner, Dhanji Bhavanji, under the Voluntary Disclosure Scheme, 1976.

(3.) AGGRIEVED by the above order, the assessee applied to the Tribunal for making a statement of the case and referring two questions to this Court for opinion. One of the proposed questions related to the correctness of that part of the order of the Tribunal by which it had held that the sum of Rs. 25,000 was rightly added to the income of the assessee as income from undisclosed sources. The second question proposed by the assessee pertained to the finding of the Tribunal that the declaration having been made by one of the partners of the assessee firm, the immunity provisions of the Voluntary Disclosure Act, 1976, were not applicable to the assessee firm. The Tribunal did not refer the first question. It has, however, referred the controversy raised in the second proposed question to this Court by the present reference.