COMMISSIONER OF INCOME TAX Vs. S M OMER

JUDGEMENT

(1.) THE Tribunal has forwarded the following question of law to this Court under S. 256(1) of the IT Act, 1961 ("the Act") :

(2.) THE assessment year involved is 1973-74 for which the relevant accounting year ended on 31st March, 1973. At the very outset, the learned advocate appearing on behalf of the assessee pointed out that the assessee had died long ago and the assessee's counsel informed the IT authorities about his death and no substitution has been made. For the reasons given below, we do not think that this case should be adjourned for the purpose of making substitution.

(3.) AGAINST the said order of the CIT(A), the Department filed an appeal before the Tribunal. The Tribunal did not interfere with the order of the appellate authority. Both the CIT(A) and the Tribunal held that the entire amount invested for the raw materials could not be added as income inasmuch as for the purpose of earning this income, the assessee had made certain expenditure. The learned advocate appearing on behalf of the Revenue relied on the provisions of S. 69 of the Act, 1961 and submitted that this unexplained investment should be added as income of the assessee. We are not inclined to accept this submission inasmuch as S. 69 has no manner of application on the facts and circumstances of this case but S. 69 has application in the case of unexplained investment made by the assessee which are not recorded in the books of account. The assessee supplied the goods after incurring certain cost and after manufacturing the goods and the amount that was received from the Defence Department could not represent the net income but it was the sum received including the profit and expenditure. In this reference, the finding made by the Tribunal had not been challenged and no question of perversity has been raised and, as such, the findings made by the Tribunal in this behalf could not be interfered with by the High Court in a reference and we do not find anything wrong in the order of the Tribunal in this regard. Accordingly, the question of law in this reference is answered in the affirmative and in favour of the assessee. There will be no order as to costs.