- (1.) The present appeal has been filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as the Act) against the order of Income Tax Appellate Tribunal, Allahabad dated 31.03.2002. The appeal has been admitted vide order dated 14.08.2002 on the following two substantial questions of law. 1. Whether on the facts and in the circumstances of the case, burden as contemplated under section 68 of the Act to explain about the nature and source of the deposits has been explained by the appellant? 2. Whether the genuineness of the gift is relevant for coming to the conclusion that the burden about the nature and source of the deposit has not been discharged? Briefly stated, the facts giving rise to the present appeal are as follows. The appeal relates to the Assessment Year 1992-93. The appellant is a partnership firm in which Mohd. Khalid and Zafar Ahmad were the partners. During the previous year relevant to the Assessment Year in question, Mohd. Khalid deposited a sum of Rs. 1,24,000/- whereas Zafar Ahmad deposited a sum of Rs. 1,04,000/- in their capital account in the firm. During the course of the assessment proceedings, the Assessing Authority asked the appellant to explain the source of the aforesaid deposits. The appellant filed explanation along with various evidences to show that the amounts were deposited by the two aforementioned partners of the firm in their capital account. It was further explained that Mohd. Khalid had received the amount by way of gift from six persons and all the six persons have filed their Income Tax Returns and also Gift Tax Returns. Zafar Ahmad has received the said amount by way of gift from five persons and these five persons have also filed their Income Tax Returns and the Gift Tax Returns. The two partners are assessed to income separately. The Assessing Authority did not accept the plea of the appellant and made an addition of Rs. 1,24,000/- and Rs. 1.04,000/- towards unexplained deposit under section 68 of the Act.
(2.) Feeling aggrieved, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals), Allahabad, who vide order dated 09.03.1995 allowed the appeal and accepted the deposits made by the two partners. He had held that the appellant has been able to discharge its burden to prove the nature of the deposit and its source.
(3.) The Revenue feeling aggrieved preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal by the impugned order had allowed the appeal and reversed the order of the Commissioner of Income Tax (Appeals).;