LAKSHMI RICE MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A statement of case has been submitted to this court tinder Section 66(1) of the Indian Income-tax Act, 1922, by the Income-tax Appellate Tribunal, Patna "Bench, by an order dated the 15th July, 1969, referring the following question of law for the opinion of this court:

(2.) THE short facts necessary for the disposal of this reference case may be stated as follows. On August 17, 1946, the assessee filed its return for the relevant assessment year. On November 7, 1946,, the assessment proceedings were taken up by the Income-tax Officer when the books of account of the assessee were first examined. An order of assessment was made on October 4, 1948. THE assessee took up the matter in appeal to the Appellate Assistant Commissioner of Income-tax, who by his order dated November 14, 1949, set aside the assessment order of the Income-tax Officer and remanded the case to him for reassessment. By an order dated January 27, 1958 (copy marked annexure "A" to the statement of the case), the Income-tax Officer passed an order of reassessment which was affirmed in so far as the present question is concerned by the Appellate Assistant Commissioner by his order dated October 31, 1965, (annexure "B" to the statement of the case). THE assessee then went up in second appeal before the Income-tax Appellate Tribunal, Patna Bench, which by its appellate order, dated December 22, 1967 (copy marked annexure "C" to the statement of the case), dismissed the assessee's appeal with regard to the question at issue.

(3.) FOR the foregoing reasons, I am of the view that the question referred to us by the Tribunal must be answered in the affirmative, and I hold that on the facts and in the circumstances of this case the Tribunal had erred in coming to the conclusion that the cash balance of Rs. 1,70,038 did not include 140 high denomination notes when they were presented on January 22, 1946, to the bank for encashment. This reference is accordingly answered in favour of the, assessee and against the revenue. I also hold that the assessee will be entitled to the costs of this hearing at a consolidated figure of Rs. 150 only.