- (1.) On an application under Section 256(2) of the Income-tax Act, 1961, this court has directed the Tribunal to refer the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the interest amounting to Rs. 50,300 on the ground that the loans themselves had not been added earlier?"
(2.) In compliance with our direction the aforesaid question has been referred for our opinion.
(3.) The relevant assessment year is 1987-88. The previous year ended on March 31, 1987. During the course of assessment, the Assessing Officer noticed that the assessee has claimed interest of Rs. 50,800 paid to Master Utsav Agarwal, Mr. Nidhi Agarwal, Binita Agarwal, Deepa Soni, Sukumar Bharech and Atmaram Poddar. On further scrutiny the Assessing Officer found that Utsav Agarwal opened his Savings Bank Account No. 4635 on February 20, 1986. His cash deposit was Rs. 101. Thereafter, Rs. 1,00,000 was deposited to that account on March 18, 1986. By transfer Rs. 50,000 was obtained from Manisha Agarwal and Rs. 50,000 from Puja Agarwal. Utsav Agarwal has no source of income and then this amount of Rs. 1,00,000 has been given to Sterling Corporation. It is further found that Rs. 25,000 have been deposited on August 26, 1986, to the account of Utsav Agarwal and Rs. 35,000 was again lent out to Sterling Corporation by Utsav Agarwal.;