ADDITIONAL COMMISSIONER OF INCOME TAX Vs. SADIQ ALI

JUDGEMENT

(1.) THIS reference which originally arose out of two cases before the Tribunal was consolidated into one and, therefore, one reference has been made by the Tribunal to this court. The reference has been made by the Tribunal at the instance of the Additional Commissioner of Income-tax, Patiala, and arises out of the order of the Tribunal dated June 11, 1971, passed in I.T.As Nos. 459 and 460 of 1969-70.

(2.) THE facts giving rise to this reference may be summarized as follows. THE assessee, Messrs. Sadiq Ali and Bros., is a registered firm with its headquarters at Srinagar and branch at Bombay and deals in Kashmir Arts goods. THE firm consists of nine partners. THE assessment relates to the accounting years ending March 31, 1964, and March 31, 1965, i.e., assessment years 1964-65 and 1965-66. For these years the assessee filed its return declaring income of Rs. 27,293 for the assessment year 1964-65 and Rs. 54,595 for the assessment year 1965-66. In connection with the return for the assessment year 1964-65, the Income-tax Officer made additions of Rs. 10,985 and Rs. 10,585 in the trading accounts of the head office and the Bombay branch of the firm respectively. THEse additions were made with the tacit consent and agreement of the assessee. THE Income-tax Officer also made a similar agreed addition of Rs. 40,000 out of unexplained cash credits of Rs. 50,000 found credited in the accounts of the partners in the books of the firm. Thus the total income was determined at Rs. 96,630 for the assessment year 1964-65, while for the assessment year 1965-66 an agreed addition of Rs. 16,823 was made to the income declared from the Bombay branch and a further sum of Rs. 15,000 as credits was added in the names of Khan Muzaffar Ali, Maulvi Amjad Ali and Maulvi Iftikhar. Thus the total income for the year was determined at Rs, 91,970 by order of the Income-tax Commissioner.

(3.) THE order of the Tribunal is marked as annexure "E" and has been carefully perused by us.