- (1.) THIS is an application under S. 256(2) of the IT Act filed at the instance of the Revenue in which the following two questions have been raised : "1. Whether, on the facts and legal position of the case, the Hon'ble Tribunal was justified in holding that the cash payments exceeding Rs. 2,500 made by the assessee amounting to Rs. 44,000 were not disallowable under S. 40A(3) ?. 2. Whether, in view of ratio of the decision of Hon'ble High Court of Andhra Pradesh in the case of M.M.A.K. Mohideen Thamby and Co. vs. CIT (1959) 36 ITR 481 (AP) Hon'ble Tribunal's decision in the case of Dhorajia Construction Co. vs. ITO (1991) 92 CTR (Trib) (Ahd) 510 and Hon'ble Allahabad High Court in the case of CIT vs. Kapur Bros. (1979) 10 CTR (All) 280 : (1979) 118 ITR 741 (All), the Hon'ble Tribunal was correct in law in deleting the addition of Rs. 54,000 made in the hands of the firm under S. 68 of IT Act, 1961 ?"
(2.) THE applicant has sought direction to the Tribunal to refer the aforesaid two questions for the opinon of this Court. We have heard learned counsel for the parties. So far as question No. 1 is concerned, in our opinion, it does raise a question of law which arises out of the order of the Tribunal. The application to that extent is allowed.
(3.) COMING to question No. 2, we may observe that certain cash credits were found recorded in the books of the assessee appearing in the names of its partners. The ITO accepted the explanation with regard to few deposits while in respect of other deposits aggregating to Rs. 54,000, the ITO taxed the same as income of the assessee from undisclosed source on the finding that the partners of the firm could not have made the deposits credited in their respective accounts. The first appellate authority gave partial relief to the assessee. Cross appeals were filed before the Tribunal, one by the Revenue and the other by the assessee. On appreciation of the evidence that was placed before the Tribunal, the Tribunal held that all the deposits appearing in the names of the partners belong to them and there was no occasion for the ITO to have assessed the amount aggregating to Rs. 54,000 as income of the assessee. The findings recorded by the Tribunal are pure findings of fact based on appreciation of the evidence. In our opinion, question No. 2 does not give rise to any statable question of law. We may observe that the case law cited in question No. 2 proposed in this application and set out above, have no bearing on the facts with which the Tribunal was concerned and are clearly distinguishable from the case of the assessee. Accordingly, the application, in so far as it relates to question No. 2 is liable to be rejected.;