COMMISSIONER OF INCOME TAX Vs. RAJNANDGAON ROADWAYS LIMITED

JUDGEMENT

(1.) AT the instance of the Revenue, a direction was given by this court under Section 256(2) of the Income-tax Act, 1961, to state the case and refer for the decision of this court, the following question of law, namely :

(2.) THE material facts are these. THE assessee is a private company deriving income from plying passenger buses. For the assessment year 1975-76, on a scrutiny of the account books of the assessee, the Income-tax Officer discovered an amount of Rs. 30,000 shown as borrowed from Sardar Jagdeepsingh, son of Dhamsingh. THE Income-tax Officer came to the conclusion that the genuineness of this entry was doubtful. Accordingly, he added the amount of Rs. 30,000 to the assessee's income as income from undisclosed sources. He also initiated action under Section 271(1)(c) of the Act. THE Inspecting Assistant Commissioner after hearing the assessee, imposed a penalty of Rs. 30,000. THE assessee preferred an appeal before the Tribunal. THE Tribunal came to the conclusion that the material present was not sufficient to accept the case of either the Revenue or of the assessee. Accordingly, it set aside the order of the Inspecting Assistant Commissioner imposing the penalty and directed the Inspecting Assistant Commissioner to decide the matter afresh after giving a reasonable opportunity to the assessee to produce all the materials on which it relied.

(3.) CONSEQUENTLY, the above question is answered in the affirmative and against the Revenue by saying that the Tribunal was justified in setting aside the Inspecting Assistant Commissioner's order imposing the penalty and remanding the case to him. Since no one has appeared to oppose, there shall be no order as to costs.