COMMISSIONER OF INCOME TAX Vs. GUNWANTIBAI RATILAL

JUDGEMENT

(1.) THE is an application under s. 256(2) of the IT, 1961 (hereinafter referred to as "the Act").

(2.) THE material facts giving rise to this case, briefly, are as follows : THE assessee is an individual and the assessment year in question is 1978-79. THE assessee had deposited certain amount with the firm Ratilal Manekji. THE case of the assessee was that interest income did not accrue in the relevant year of account as the assessee had agreed to waive interest. THE contention of the assessee was not upheld by the ITO. THE ITO was of the view that interest income amounting to Rs. 35,677 had accrued to the assessee during the relevant accounting year and the same was assessed accordingly. THE appeal preferred before the AAC was dismissed. THE assessee thereupon filed a Second Appeal before the Tribunal. THE Tribunal found, after consideration of the entire material on record, that the agreement entered into by the assessee with the firm not to charge interest was genuine and reasonable and that the assessee had waived her right to claim interest. THE Tribunal held that on the basis of the evidence on record, it was fully established that interest income had not accrued to the assessee in the year of account. In this view of the matter, the Tribunal allowed the appeal. An application by the Department to make a reference was rejected by the Tribunal. Hence, the Department has filed this application.