Delhi High Court
Commissioner Of Income-Tax vs Shanti Vijay And Co. on 25 July, 1990
Bench: B Kirpal, S Duggal
JUDGMENT
1. We have heard counsel for the parties. In this case, amongst other questions, one question which arose for consideration before the Income-tax Officer when he was making original assessment was whether loans of Rs. 8,15,000 shown in the books of account of the respondent were genuine or not. Out of this amount, a sum of Rs. 3,00,000 was standing in the name of one B. J. Mehta and Rs. 5,15,000 in the name of ten other parties. The Income-tax Officer disbelieved the contention of the assessed that the amounts were genuine and he treated them as the assessed's undisclosed income.
2. The appeal filed by the assessed was successful before the Appellate Assistant Commissioner but the Income-tax Officer filed second appeal to the Income-tax Appellate Tribunal, which, vide its order dated November 29, 1980, allowed the appeal and treated these credits as income of the respondent/assesses from undisclosed sources. Thereafter, an application moved under section 256(1) of the Income-tax Act met with a similar fate. We are also informed that a special leave petition filed to the Supreme Court was also dismissed.
3. Thereafter, the assessed filed an application under section 254 of the Act for rectification of the order dated November 29, 1980, of the Income-tax Appellate Tribunal. The stand now taken by the assessed was that even if the amount of Rs. 8,15,000 was considered as an income from undisclosed sources, the same was taxable in the hands of an association of persons because there was a joint venture entered into by the assessed with Lalji and Co., of Bombay and Maharaj Kumar Pratap Singh of Alwar. It may here be stated that, even in the proceedings before the Tribunal, there was a mention that there was a joint venture but it was never agitated that, if the cash credits were to be taxed, it should be taxed in the hands of an association of persons. This contention was raised by the assessed in the application under section 254 of the Act and the Tribunal, vide its order dated February 14, 1984, purported to rectify its earlier order by directing the Income-tax Officer to examine the claim with regard to the assessability of this amount in the hands of an association of persons, the result of which would be, that if the hands of an association of persons, the result of which would be, that if the contention of the assessed is accepted, this amount will have to be deleted from the income of the respondent. The application under section 254 having been dismissed, (sic), the present application has been filed.
4. Mr. Bishamber Lal also contends that the Tribunal directed the Income-tax Officer to ascertain whether there was a joint venture or not. This may be so, but the question arises whether the Tribunal has jurisdiction to issue such a direction and, therefore, interpretation of section 254 is involved.
5. In our opinion, important issues arise in the present case and a question of law, as proposed, does arise, specially in view of the judgment of this court in the case reported as CIT v. K. L. Bhatia [1990] 182 ITR 361.
6. We are unable to agree with Mr. Bishamber Lal that the question involved is a pure question of fact. In our opinion, as already stated, the questions involves the interpretation and scope of section 254 of the Act. Therefore, we direct the Tribunal to state the case and refer the following question of law to this court :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was a mistake apparent on the record which required rectification in terms of section 254 of the Act and whether it was correct in holding that the order in the miscellaneous application in favor of the assessed did not amount to a review of the earlier order in I. T. A. No. 2065/Delhi of 1976-77, dated November 29, 1980 ?"
7. There will be no order as to costs.
