- (1.) The Income-tax Appellate Tribunal, Allahabad has referred the following question of law under Section 256(1) of the Income-tax Act, 1961. hereinafter referred to as 'the Act', for opinion to this Court. Whether on the facts and circumstances, the Tribunal was legally justified in holding that the alternative plea of set off because of the confiscation of the recovered gold by the Central Excise authorities at Bangalore was not available to the assessee
(2.) The present Reference relates to the Assessment Year 1985-86.
(3.) Briefly stated the facts giving rise to the present Reference are as follows: The assessee was found in possession of primary gold weighing 937 grams by the Customs and Central Excise Officers at Bangalore who took search of the assessee. The assessee was found wearing dark shoes and socks. On removal of shoes and socks, it was noticed that a paper packet was kept in each shoe. On scrutiny of the said packets, they were found to contain four gold pieces with inscription as refined gold weighing 259 grams. 1.92 grams, 225 grams and 261 grams each of 24 carat purity. On information received, the Income-tax Officer issued a notice under Section 148 of the Act. In reply to that notice, the assessee contended that the gold had come out of the old jewellery belonging to his mother and the same was being carried by him for sale. The said contention was not accepted. He had further stated that he had invested Rs. 1 lac with one Shri Surendra Prasad Agrawal in connection with Saree business. Consequently, both the amounts, i.e., Rs. 1,86,000/- the valuation of the gold and Rs. 1 lac invested by the assessee were added in the returned income of the assessee. In appeal, the said addition was confirmed by the Commissioner of Income-tax (Appeals). In second appeal filed by the assessee, the said addition was also sustained by the Tribunal.;