R.K. Gulati, J. - (1.) The Commissioner of Income-tax, Meerut, has made this application under Section 256(2) of the Income-tax Act (for short, "the Act") with a prayer that the Income-tax Appellate Tribunal, New Delhi (Bench-A), may be required to refer the following question as a question of law to this court for its opinion : "Whether, in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct to delete the credit appearing in the name of Sri Ratish Chand Gupta ?"
(2.) We have heard learned standing counsel and Sri P.K. Jain, who appeared on behalf of the respondent. Messrs. Sarvodaya Furnishers and Electricals (P.) Ltd., Meerut, the respondent, is a private limited company registered under the Companies Act. The dispute is in respect of the assessment year 1985-86. During the course of the assessment proceedings for that year, the Income-tax Officer noticed certain deposits in the account books of the assessee and one such deposit was of Rs. 50,000 appearing in the name of Ratish Chand Gupta. To substantiate the plea that the deposit in question was genuine and the money was taken on loan, the assessee filed a confirmation from the depositor which was to the effect: "I confirm the above account. I am assessed to income-tax in Circle-I(4), Meerut."
(3.) An initial inquiry into the matter conducted by an Income-tax Inspector revealed that there was no assessee by the name of Ratish Chand Gupta in the circle mentioned in the confirmation. Subsequently, the assessee submitted a certain assessment order said to have been made in the name of the depositor. However, the Income-tax Officer not being satisfied with the explanation of the assessee brought to tax the deposit in question as the income of the assessee from undisclosed sources under Section 68 of the Income-tax Act.;