BABULAL AND BROS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this application under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question of law to this court for its opinion :

(2.) THE material facts giving rise to this reference, briefly, are as follows : While framing the assessment for the assessment year 1972-73, the Income-tax Officer made an addition of Rs. 7,918 to the income of the assessee on account of undervaluation of the closing stock. This addition was confirmed on appeal by the Appellate Assistant Commissioner. While framing the assessment for the assessment year 1973-74, the Income-tax Officer did not make any corresponding increase in the value of the opening stock in the subsequent accounting year, even though the Income-tax Officer had made an addition of Rs. 7,918 in the closing stock of the earlier accounting year. THE assessee, therefore, preferred an appeal before the Appellate Assistant Commissioner who directed that necessary adjustment be made in the opening stock in the assessment for the assessment year 1973-74. Now, in the second appeal preferred by the assessee from the order passed in appeal by the Appellate Assistant Commissioner for the assessment year 1972-73, the Tribunal directed deletion of Rs. 7,918 made by the Income-tax Officer on account of alleged undervaluation of closing stock. In the meanwhile; in pursuance of the order passed by the Appellate Assistant Commissioner relating to the assessment for the assessment year 1973-74, the Income-tax Officer had passed a consequential order making the necessary adjustment in the opening stock. THEreafter, the Income-tax Officer rectified the order in view of the order passed by the Tribunal relating to the assessment for the assessment year 1972-73. Against this order of rectification, an appeal was preferred before the Appellate Assistant Commissioner which was dismissed. THE second appeal preferred by the assessee was also dismissed by the Tribunal. Aggrieved by the order passed by the Tribunal, the assesses sought reference and it is at the instance of the Tribunal that the aforesaid question of law has been referred to this court for its opinion.