C.S.P.SINGH, J. - (1.) THE Tribunal, Allahabad Bench, Allahabad under S. 66(2) of the Indian IT Act, 1922 has referred the following question for our opinion :-- "Whether upon the facts and in the circumstances of the case, the findings of the Tribunal that the amounts of Rs. 19,620/- and Rs. 8,140/- were the income of the assessee HUF taxable during the asst. yrs. 1959-60 and 1960-61 respectively and also that, therefore, the claim of Shrimati Sukho Kunwar, wife of the Karta of the assessee family, was liable to be disallowed, were findings valid in law ?"
(2.) THE assessment years involved are 1959-60 to 1962-63. The assessee, a HUF, during the relevant accounting period, was carrying oN the business of supplying sand. While examining the accounts for the year 1959-60 and 1960-61, the ITO, found that there was an account of Shrimati Sukho Kunwar, wife of the Karta of the assessee showing deposits of Rs. 19,620/- in the previous year ending 31st March, 1959 and Rs. 8,140/- in the previous year ending 31st March, 1960. The assessee was called upon the explain the source of these deposits, and thereupon the assessee disclosed that the cash deposit came out of the money which Shrimati Sukho Kunwar received in the year 1936 from her father, and also out of the money which the assessee receive on the death of his father in 1932. In support of this explanation, the assessee relied on a statement recorded by the ITO on 4th Feb., 1943 about the source of money which the assessee had invested in the money lending business. The ITO did not accept the explanation, and treated the deposit in the respective two years as the assessee's income from undisclosed source. Interest paid on these deposits was also disallowed.
(3.) AN appeal was filed by the assessee before the AAC. In connection with the appeal for the earlier year i.e., 1958-59, the AAC had on a consideration of the explanation of the assessee, deleted an addition of Rs. 14,542/- made in respect of cash credit of Shrimati Sukho Kunwar. This order had been upheld by the Tribunal on appeal by the Department. However, in respect of the deposit of Rs. 19,620/- for the year 1959-60, the AAC held that the deposit remained unexplained, and the source from which the assessee tried to explain the deposit were already exhausted , by the benefit given in the year 1958-59 for a sum of Rs. 14,542/- As a result the order of the ITO was upheld. The AAC took a similar view of the deposit of Rs. 8,140/- for the asst. yr. 1960-61. In the years 1961-62 and 1962-63, the only question involved was as to the amount of interest paid on these deposits. In conformity with the order passed for the year 1959-60 and 1960-61, wherein it was held that the deposit represented the undisclosed income of the assessee, claim for interest was also disallowed. The Tribunal on appeal upheld the addition.;