JAWAHAR LAL GUPTA, J. - (1.) THE Revenue has filed this appeal under S. 260A of the IT Act, 1961. It raises the following question for decision : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the deletion of addition of Rs. 1,82,988 made by the CIT(A) on account of income from undisclosed sources introduced by the firm in the shape of exaggerated income from agriculture in the hands of partners ?"
(2.) THE assessee is a partnership firm. It is doing the work of commission agent. For the asst. yr. 1991 92 the assessee showed an income of Rs. 77,030. The AO made an addition of Rs. 1,82,988 and fixed the taxable income at Rs. 2,60,018. Aggrieved by the order, the assessee filed an appeal. The CIT(A) vide order dt. 30th June, 1992, found that two of the partners had agricultural land measuring 35 acres and 10 acres. They had sold wheat and narma crops. As a result, it had the requisite amount to invest towards the capital account of the firm. Thus, the addition made by the AO was set aside. The Revenue challenged the order passed by the appellate authority. The Tribunal after consideration of the matter has found that the partners had an agricultural income of Rs. 3,02,500. The income pertains to the holding which belongs to the partners and their family members in their individual capacity. The assessee firm had shown the income "in its account books, in the capital account of the individual partners, Shri Biker Singh and Shri Baltej Singh, etc." On this basis, the Tribunal concluded that the addition made by the AO is nothing but based on "conjectures and surmises...." Still further, the Tribunal found that the "AO was not justified in adding the same as income of the assessee firm from its undisclosed sources." Thus, the appeal filed by the Revenue was dismissed by the Tribunal vide order dt. 17th Nov., 1998. Hence, this appeal.
(3.) MR . Sawhney contends that the AO had rightly made the addition by treating the amount as the undisclosed income of the firm. In support of the contention he had placed reliance on the decision in Smt. Shanta Devi vs. CIT (1988) 68 CTR (P&H) 52 : (1988) 171 ITR 532 (P&H) : TC 42R.1125.;