ASHOKPAL DAGA HUF Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ON rejection of Reference Application No. 66/(Ind) of 1994 on September 21, 1994, the applicant-assessee has filed this application under Section 256(2) of the Income-tax Act, 1961 (for short, "the Act"), to direct the Tribunal to state the case and refer two out of the four proposed questions of law, as noted below, arising out of the order dated March 11, 1994, passed by the Tribunal in I. T. A. No. 907/ (Ind) of 1992 for the assessment year 1989-90 :

(2.) BRIEFLY stated the facts of the case are that the applicant is a dealer in cloth carrying on the business in the name of "Ashoka Trading Company" as proprietary concern owned by Ashok Pal Daga as karta of a Hindu undivided family. During the course of its business, this concern borrowed money from various parties. The Assessing Officer, however, made additions under Section 68 of the Act on the ground of alleged unproved cash credit and also disallowed interest on the corresponding amount totalling Rs. 52,426 as tabulated in the application. In Appeal No. IT/206 of 1992-93/308, the appellate authority confirmed the addition for the part of the principal amount and corresponding interest, but deleted the addition of the principal amount of Rs. 65,504 and interest thereon of Rs. 1,800. In further appeal, the Tribunal, in ITA/907/(Ind) of 1992 for the assessment year 1989-90, confirmed the addition of the principal amount of Rs. 65,000 and interest thereon of Rs. 7,425 and deleted the principal amount of Rs. 3,11,000 and interest thereon of Rs. 34,576. The concern had also stated the borrowing of Rs. 50,000 and Rs. 15,000 through cheques. The applicant examined the concerned persons to establish the genuineness of loan through cheque. Yet the same was not accepted. The applicant then filed the reference application under Section 256(1) of the Act. The Tribunal declined to refer the questions and rejected the application. The applicant, thereafter, filed this application under Section 256(2) of the Act.

(3.) SHRI Vyas, on the other hand, submitted that the proposed questions out of four questions are also the questions of facts and are not referable questions of law.