KUNDANMAL KOTHARI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AS per the direction given by this Court in Civil Rule No. 1(M) of 1994, the Tribunal, Gauhati Bench, Guwahati, has referred the following question under S. 256(2) of the IT Act, 1961 ('the Act') for opinion of this Court :

(2.) FACTS are : The assessee received an amount of Rs. 1,25,000 from a creditor and this was entered into the books of account and the creditor was also identified. The creditor himself was an assessee under the Act. In spite of that the AO did not accept the entries made in the books of account as well as in the returns and required further proof. Confirmatory letters were produced and the creditor himself appeared before the ITO to give his statement confirming the fact that the amount had been paid by him to the assessee. Even then the AO did not believe this and made an addition of Rs. 1,25,000 under S. 68 of the Act. Being aggrieved, the assessee preferred an appeal before the CIT(A). The CIT(A) allowed the appeal after considering the documents. However, the Revenue approached the Tribunal and the Tribunal following the decision in Appeal No. 392 (Gau). of 1987, without discussing independently about the present case allowed the appeal preferred by the Revenue. Thereafter, the assessee requested the Tribunal to refer the above question which was refused. Situated thus, the assessee filed application before this Court which was numbered as Civil Rule No. 1(M) of 1994 By order dt. 21st March, 1994, this Court directed the Tribunal to refer the above question for opinion. Hence, the present reference.