CIT Vs. CHINNA RAM

JUDGEMENT

(1.) IN this reference under section 256(1) of the Income -tax Act (hereinafter referred to as the Act), the following question of law has been referred by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur for opinion of this court :

(2.) THE brief facts giving rise to this reference are as follows :

(3.) SHRI Mirdha in the return filed by him in respect of assessment year 1978 -79 showed the assessee -respondent as the creditor to whom he owed a sum of Rs. 1,00,000.The assessee however in his personal books of account on the basis of the cheque received by him from Shri Mirdha on 31 -3 -1978, squared up the account of Shri Mirdha even though, the cheque was encashed only on 12 -4 -1978. The Income Tax Officer after verifying the facts proceeded to complete the assessment. In the reassessment proceedings the assessee was able to satisfy the Income Tax Officer in regard to the question of advance and the manner in which it was accounted for. The Income Tax Officer completed the re -assessment proceedings, but no change was effected either in computation of the tax amount or in the amount of interest as detailed in the original assessment order. Subsequently, the assessee filed an application under section 154 of the Act for deletion of interest on the ground that the interest under sections 139(8) and 215 of the Act could riot be levied in re -assessment proceedings. The application was rejected by the Income Tax Officer on 15 -1 -1986.