SURAJ MAL SHARMA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the I,T. Act, 1961, presented in this court by the assessee, Surajmal Sharma, for directing the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as "the Tribunal") to state the case and refer three questions arising out of the order of the Tribunal dated July 30, 1974, for the decision of this court.

(2.) THE facts of the case, which have given rise to this application, may be briefly stated. THE ITO, Sawai Madhopur, by his order dated August 31, 1971, assessed the income of the assessee, Shri Surajmal Sharma, for the assessment year 1969-70, at Rs. 40,000 on estimate basis. On an appeal by the assessee, the A AC, Kota, by his order dated July 31, 1973, determined the total income of the assessee at Rs. 25,000 giving him a relief of Rs. 15,000, In doing so, the AAC took into consideration the fact that a sum of Rs. 6,000, out of the investment of the assessee during the assessment year, was raised by borrowing and the same was repaid in the year 1972, and also the fact that the assessee had made some initial investment in the money-lending business from his earlier savings. THE assessee as well as the ITO, Sawai Madhopur, went in appeal to the Tribunal against the aforesaid order passed by the AAC and the Tribunal by its order dated April 19, 1974, took the view that out of the investment alleged to have been made by the assessee during the relevant assessment year, investment to the extent of Rs. 17,000 was proved to have been made by the assessee during the period prior to the accounting year corresponding to the relevant assessment year, inasmuch as the assessee had constructed a pucca and a kucha building at the cost of Rs. 15,000 some time in the year 1966 and he had also purchased an electric motor valued at Rs. 2,000 on March 9, 1968. Even after excluding the aforesaid sum of Rs, 17,000 and the investments made from his earlier savings, the Tribunal thought that a sum of Rs. 24,000 still remained unexplained by the assessee and, as such the Tribunal confirmed the estimate of Rs. 25,000 as the income of the assessee during the relevant assessment year, as was made by the AAC.

(3.) WE, therefore, allow this application and call upon the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to state the case and refer the above question of law arising out of its order to this court for adjudication.