- (1.) IN this reference under s. 256(2) of the IT Act, 1961 (`the Act') for the asst. yr. 1979-80, the following question of law has been referred to this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the source of deposit of Rs. 48,000 has been satisfactorily explained and thereby deleting the addition of Rs.48,000 from income?"
(2.) THE assessee is an individual. THE assessment year involved is 1979-80 for which the accounting year ended on 31st March, 1979. THE IT Department carried out a search in the residential premises of the assessee on 19th Aug., 1981 and seized fixed deposit receipts of the total value of Rs. 1,60,700 out of which fixed deposits of Rs. 48,000 were found to be related to the assessment year under consideration. A deposit of Rs.36,000 was in the joint names of Smt. Indarjit Kaur (assessee's wife) and Smt. Rani Kamal Patheja (assessee's daughter). Another deposit of Rs. 12,000 was found in joint names of Smt. Indarjit Kaur (wife) and Shri Narendra Singh (assessee's son). Smt. Indarjit Kaur made a statement to the authorised officer at the time of search that she was only a housewife and had no source of income. She further admitted that all the fixed deposits in the joint names of self, son and daughter were made out of money given to her by her husband. However, in the proceedings under s. 132(5) of the Act, and during the course of regular assessment proceedings, Smt. Indarjit Kaur and other ladies tried to explain the source of said two fixed deposits. The AO rejected the claim and treated Rs. 48,000 (value of two fixed deposits) as the assessee's income from undisclosed sources. The assessee challenged the above addition in appeal before the CIT (A). The CIT (A) deleted the addition with the following observations: "I have carefully considered the facts of the case and the submission made. It is seen that the investment of Rs. 36,000 by way of fixed deposit in the name of the assessee's wife Smt. Indarjit Kaur has been properly explained as having been made by her out of a loan of Rs. 36,000 taken by her from her mother-in-law. Adequate evidence has been filed in support of the claim for the loan. Smt. Indarjit kaur has also shown this loan and investment in fixed deposit in her balance sheet and the same has been considered by the ITO. The Hon'ble Settlement Commission has also held in disposing of the settlement petition filed by the assessee that the investment of Rs.36,000 is to be considered in the hands of Smt. Indarjit Kaur only. As regards the investment of Rs. 12,000 in fixed deposit in the name of Smt. Garnit Kaur, daughter-in-law of the assessee, the appellant's contention is that the investments is out of cash gifts received by her at the time of her wedding from friends and relations. It is seen from the order under s. 132(5) that this explanation had not been accepted by the ITO only for the reasons that the investment was made in July 1978 and the marriage was in the year 1977. I do not see anything surprising about this delay of a few months in making the investment. Moreover, the amount of Rs. 12,000 cannot also be such an amount as could not have been received as marriage gift at the time of the wedding in a fairly well-to-do business family. It is also sent that the ITO assessing Smt. Garnit Kaur has also considered this amount while completing her assessment. On all these facts, I am of the opinion that there was no justification for rejecting the explanation furnished for the investment in the two fixed deposits of Rs. 36,000 and Rs. 12,000 and making addition for the same amounting to Rs. 48,000 in the hands of the assessee under s. 69 of the IT Act. The addition Rs. 48,000 is, therefore, deleted."
(3.) BEING aggrieved, the Revenue brought the issue in appeal before the Tribunal. The Tribunal after hearing both the parties at length confirmed the order of the CIT (A). As would appear from the narration of facts, the CIT (A) accepted and found that the investment of Rs. 36,000 by a fixed deposit in the name of the assessee's wife has been properly explained as has been made by her out of a loan. Adequate evidence has been filed in support of the claim for the loan which the CIT (A) had accepted. The Revenue preferred an appeal. The Tribunal did not accept the contention of the Revenue and confirmed the order. That apart, Settlement Commission also held that the investment of Rs. 36,000 shall be considered in the hands of Smt. Indarjit Kaur only. The Revenue has not challenged the aforesaid findings of the authorities as being perverse and, accordingly, this question as to whether the source of deposit was satisfactorily explained or not cannot be raised before this Court.;