COMMISSIONER OF INCOME TAX Vs. KAUSHALYA RANI BHUARI

JUDGEMENT

(1.) THE following two questions of law have been referred to this Court by the Tribunal under s. 256(2) of the IT Act, 1961 ('the Act') :

(2.) THE assessment year involved in this reference is the asst. yr. 1963-64, for which the accounting period is ended on 31st March, 1963.

(3.) THE Revenue went in appeal before the Tribunal. It was contended that there was no clear agreement on the part of the assessee to be assessed on the basis of peak credit and in view of that the AAC was wrong in acting upon the submission of the assessee. It was also contended that the interest on these loans had been impliedly disallowed by the ITO and there was no challenge to this position before the AAC. On behalf of the assessee, it was submitted that the assessee stood by the commitment to be assessed on the basis of peak credit but that this was due to the paucity of evidence in the possession of the assessee to prove the genuineness of the hundi loans in question. It was explained that non-filing of any appeal against the disallowance of interest was due to some disapprehension on the part of the assessee.