NARAINDAS GOYAL CONTRACTOR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the I.T. Act, 1961, hereinafter called "the Act", requiring the Appellate Tribunal to state the case and refer certain questions of law to this court for its opinion.

(2.) THE material facts giving rise to this application briefly are as follows : THE applicant is an assessee carrying on business as a contractor. For the assessment year 1972-73 the assessee filed his relurn of income at Rs. 12,127. THE ITO held that the proviso to Section 145 of the Act was applicable as the books of account maintained by the assessee were not verifiable. THE ITO, therefore, estimated the net profit of the assessee at 15% of the receipts shown by the assessee. THE ITO, however, disallowed the claim for deduction of interest paid by the assessee over borrowed capital. THE ITO thus made consequential additions to the disclosed income of the assessee. On appeal, the AAC held that the assessee was entitled to deduction of interest. Aggrieved by the order of the AAC, the department preferred an appeal before the Tribunal. THE Tribunal held that the assessee was not entitled to deduction of interest. Aggrieved by the order passed by the Tribunal, the assessee submitted an application for making a reference to this court, but that application was rejected. Hence, the assessee has filed this application.