R.K.AGRAWAL,J. - (1.) THE Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law under Section 256(2) of the Income Tax Act, 1961, hereinafter referred to as 'the Act' for opinion to this Court 1. Whether on the facts and circumstances of the case, the Tribunal was legally justified in holding that there was a mistake apparent from the record justifying rectification under Section 254(2) of the Income -tax Act, 1961?
(2.) WHETHER on the facts and circumstances of the case, the Tribunal was justified in recalling its earlier order dated 13.3.1987? 2. The present Reference relates to the Assessment Year 1974 -75. Briefly stated the facts giving rise to the present Reference are as follows: The assessee -opposite party has been assessed to income -tax in the status of 'registered firm'. In the course of the assessment proceedings for the Assessment Year 1974 -75, the assessing officer noticed that the assessee had shown deposits of Rs. 1,49,360/ - from 83 persons. It was claimed by the assessee that they were trade deposits. However, the Income -tax Officer treated it as undisclosed income and added to the total income of the assessee. Feeling aggrieved the assessee preferred an appeal before the Commissioner of Income -tax(Appeals), who deleted the addition. The Revenue feeling aggrieved by the order deleting addition preferred an appeal before the Tribunal. The Tribunal had allowed the appeal filed by the Revenue and had restored the assessment order. While restoring the order of the Income Tax Officer the Tribunal had made the following observations:In the present case, the assessee claimed the depositors as trade depositors. The statements and the details showing deposits and supply filed by the assessee do not inspire confidence. It is surprising that some of the goods were supplied to the different parties on the same date on different rates. For example the goods supplied on 3.12.1977 to Kishori Lal Kedarnath(serial No. 14) of 75 bags @ Rs. 2000/ - and on the same date at the same place to Babulal & Co.(serial No. 16) i.e. in Gorakhpur 36 bags were supplied at Rs. 1,000/ -. The deposits alleged to have been ' received from both of them were on 5.12.73 and 8.12.1973 i.e. almost at the same time. On perusal of the statement, we find that the assessee had submitted a concocted story about the transactions. All the deliveries were made in 1977 at the time of original assessment proceedings, which lead us to believe that the transactions entered into the books of accounts were nothing, but to support the story. We, therefore, hold that the genuineness of the credits cannot be accepted.
(3.) THEREAFTER , the assessee had moved miscellaneous application No. 34/Alld/1989. By moving that application, it was pointed out that the observation made in the order of the Tribunal to the effect that the goods had been supplied to different parties, on the same day at the same place is factually incorrect. It was further pointed out that M/s. Kishori Lal Kedarnath is a party situated at Siswa Bazar, whereas M/s. Babulal and Co. is a firm situated at Barhal Ganj. It was stated in the application Siswa Bazar and Barhalganj are two different tehsils of district Gorakhpur and that the assessee -firm was located in district Deoria. The distance between the assessee's place of business and Siswa Bazar was stated to be 60 kms., whereas the distance of Barhalganj was only 30 kms. Thus, it was contended that the inference of non -genuineness of cash credits had been drawn by the Tribunal under a misconception of fact that the goods had been supplied at the same place, while in fact the goods were supplied to the two parties at different places. Thus, the mistake was sought to be rectified.;