POONAM CHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under s. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act") the Tribunal. Indore Bench, Indore, has referred the following question of law to this Court for its opinion :

(2.) THE material facts given rise to this reference, briefly are as follows : During the course of assessment proceedings in the case of Shri Chandanmal and, his brother Poonamchand, the ITO found that Shri Chandanmal had made a gift of Rs. 25,000 on 6th Aug., 1978 as under : THE ITO also found that on 7th Oct., 1978 Shri Poonamchand had made a gift of equal amount that is to say, Rs. 25,000 as under : In view of these facts, the ITO concluded that there were cross-gifts to the extent of Rs. 17,000 (excluding the gift of Rs. 8,000 by Shri Chandanmal to Shrimati Shardabai) and hence, he invoked the provisions of cls. (iv) and (v) of s. 64(1) of the Act and included in the total income of Shri Chandanmal, a sum of Rs. 2,033 being the income by way of interest of Shrimati Motanbai, Shri Rajendra Kumar and Shari Ramanlal. Similarly, the ITO included in the total income of Shri Poonamchand Rs. 2,040 the income by way of interest of Shrimati Pukhrajbai, Kumari Angurabala and Kumari Madhubala. Aggrieved by these orders, the assessee preferred an appeal before the AAC. THE AAC upheld the orders passed by the ITO. On further appeal, the Tribunal held as follows :