R.K.Gulati, J. - (1.) These two reference applications under Section 256(2) of the Income-tax Act, 1961, pertaining to the assessment year 1982-83 have been filed at the instance of the Revenue. In each of these two applications, the applicant has desired that the Income-tax Appellate Tribunal may be directed to refer the following two common questions to be questions of law for the opinion of this court : "1. Whether, in taw and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the item as mentioned in annexure BM-67 seized at the time of search and seizure operation was the same as appearing in the assessee's valuation report of May, 1980, and, as such, it stood explained, and whether it is not a case of miscarriage of justice and drawing wrong conclusions from the given facts ?
(2.) Whether, in law and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in deleting the entire addition of Rs. 5 lakhs made by the Income-tax Officer to the income of the assessee as unexplained investment under Section 69A of the Income-tax Act, 1961 ? "2. As common questions have been raised, we propose to deal with them by a common order. Briefly stated, the facts are these : The assessee-respondent is a Hindu undivided family and is assessed to tax under the name "B.M. Kanodia". It appears that in a search conducted by the officials of the Income-tax Department at the residential premises of the assessee and that of the bigger Hindu undivided family, certain items of jewellery were seized as per annexure BM-67 to the panchnama drawn in the name of B.M. Kanodia. During the assessment proceedings for the year in question, the Income-tax Officer felt satisfied that the assessee was able to reconcile all items of jewellery except two items, vide its valuation report dated May 29, 1980, as on December 31, 1978. Out of these two items, one was a diamond ring valued at Rs. 5 lakhs by the departmental valuer. The case of the assessee was that the diamond ring found and seized during the search was one and the same item which found mention in its valuation report dated May 29, 1980 and was valued at the relevant time at Rs. 1 lakh. However, the Income-tax Officer did not agree with the assessee and he brought to tax the amount of Rs. 5 lakhs under the head "Unexplained investment" under Section 69A of the Income-tax Act.
(3.) In appeal, the Commissioner of Income-tax (Appeals) granted partial relief to the assessee by substituting the valuation at Rs. 2,62,500 for Rs. 5 lakhs adopted by the Income-tax Officer. Feeling still aggrieved, the assessee preferred a further appeal to the Income-tax Appellate Tribunal. The Department also felt aggrieved against the appellate order which allowed the relief of Rs. 2,37,000 to the assessee, and it also filed a cross-appeal to the Tribunal. Both the appeals were decided by a common order. The appeal filed by the Department was dismissed and that of the assessee was allowed. The applications under Section 256(1) for a reference to this court were also rejected by the Tribunal. Feeling aggrieved, the Revenue has come up in these two applications.;