- (1.) THE Income -tax Appellate Tribunal, Delhi, has referred the following questions of law under Section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), for opinion to this Court: 1. Whether, on facts and in the circumstances of the case, the Income -tax Appellate Tribunal was legally correct in deleting the addition of Rs. 4,58,000 for the assessment year 1987 -88 in respect of the credits shown from various parties despite the non -satisfaction of the conditions laid down under Section 68 of the Income -tax Act by the assessee in respect of the credits?
(2.) WHETHER , on the facts and in the circumstances of the case, the Income -tax Appellate Tribunal was legally correct in deleting the addition of Rs. 3,83,000 for the assessment year 1986 -87 in respect of the credits shown from various parties despite the non -satisfaction of the conditions laid down under Section 68 of the Income -tax Act by the assessee in respect of the credits? Whether, on the facts and in the circumstances of the case, the Income -tax Appellate Tribunal was legally correct in deleting the addition of Rs. 43,543 for the assessment year 1988 -89 in respect of credits shown from various parties despite the non -satisfaction of the conditions laid down under Section 68 of the Income -tax Act by the assessee in respect of the credits? 2. The present reference relates to the assessment years 1986 -87, 1987 -88 and 1988 -89. 3. The brief facts giving rise to the present reference are as follows: A search and seizure operation took place at the residential premises of the assessee on October 14, 1987, during which it transpired that the assessee had constructed a residential house property at No. 128, Kamla Nagar, Meerut. A reference was also made to the queries raised at the time of the earlier search and seizure operations conducted on September 18, 1987, at the business premises of the firm M/s. Lal Chand Ganga Sahai as also at the residential premises of one of the partners, namely, Shri Anant Ram. In the course of the search and seizure operations as also in the course of the subsequent assessment proceedings, the assessee stated that the land for the house property was purchased in 1969 for a sum of Rs. 15,000 and that the investment in the property had been disclosed in the name of Lalit Kumar Goel, HUF, viz., the present assessee. It was also stated that the investment had been made over a period of three financial years relevant to the assessment years 1986 -87, 1987 -88 and 1988 -89 to the tune of Rs. 8,84,543. As regards the source, the assessee stated that the amounts had been taken from various individuals and entities including the funds of the HUF and also Shri Lalit Kumar Goel, individual. It is a matter of record that the Income -tax Officer referred the matter to the Valuation Officer for purposes of determining the investment in the house property and the said Valuation Officer vide his report dated March 16, 1991, estimated the same at Rs. 81,64,000. The Income -tax Officer further expressed dissatisfaction with the replies and explanations given about the sources of the funds from which the property had been constructed. He also highlighted another aspect of the matter and that being the claim made by the different individuals from whom the assessee purported to have received the funds ; that the amounts withdrawn by them had been utilised for household purposes. It was also observed in the assessment order that there was no reference whatsoever, in any document to the effect that the withdrawals had been made for the purpose stated, viz., house construction. The Income -tax Officer also referred to the explanation given by the assessee to the effect that a major chunk of the investment in the construction of the house property had been financed by M/s. Anant Ram Prem Prakash, viz., Rs. 6,11,000. According to the Income -tax Officer, the Department had not accepted the existence of the aforesaid entity. In the final analysis, he treated the entire investment in the house property, viz., Rs. 8,84,543 as warranting an addition under Section 69 of the Act. For the assessment year 1986 -87, an addition of Rs. 3,83,000 was made and the corresponding figures for the assessment years 1987 -88 and 1988 -89 were Rs. 4,58,000 and Rs. 43,543.
(3.) IN appeal the Commissioner of Income -tax (Appeals) deleted the addition made under Section 69 of the Act on the ground that the investment in construction of the house has been properly explained by the withdrawals shown by the respondent -assessee which were also found at the time of search on October 14, 1987. The Tribunal has upheld the finding given by the Commissioner of Income -tax (Appeals).;