- (1.) This appeal been preferred by the revenue under Section 260A of the Income-tax Act, 1961 (in short, "the Act") against the order dated 24.2.2006, Annexure P-I passed by the Income Tax Appellate Tribunal, "SMC", Delhi (in short, "the Tribunal"), proposing to raise following substantial questions of law for determination of this Court:-- "(i) Whether the Tribunal has acted within its jurisdiction in holding that the amount aggregating to Rs. 1,03,648/- was assessable as business income of the assessee for the assessment year 1993-94 that too by making out a new case in favour of the Department/revenue? (ii) Whether the amount of Rs. 1,03,648/- representing the advance money found credited in the books of accounts of the assessee was liable to be taxed as 'income from business' under the Income-tax Act, 1961 during the assessment year 1993-94 even when the provisions of section 41(1) or section 68 were not attracted to the case of the assessee-appellant? (iii) Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in arriving at the conclusion that the amount of Rs. 1,03,648/- was assessable as income of the assessee under the head 'income from business' during the assessment year 1993-94? (iv) Whether the amount of Rs. 1,03,648/- was chargeable to tax as business income in the assessment year 1993-94 by virtue of Section 41(1) of the Act even when the Department/Revenue failed to bring material on record to show that the liability of the assessee appellant had ceased or remitted during the assessment year 1993-94 and therefore, the amount in question was liable to be taxed as business income during the said assessment year? (v) Whether in the absence of any finding with regard to the year in which the liability had ceased to exist or having been remitted, even when the transaction pertained to the financial year 1986-87, was the Tribunal right in law in concluding that the amount of Rs. 1,03,648/- was still assessable as income of the assessee under the head 'income from business' during the assessment year 1993-94? (vi) Whether the Tribunal misdirected itself in law as well as on facts in wrongly applying the decision rendered by the Hon'ble Supreme Court in the case of CIT v. T.V. Sundaiam Iyengar & Sons Ltd., 1996 222 ITR 344 Briefly, the facts necessary for adjudication of the controversy involved, as available on record, may be noticed. Return declaring total income of Rs. 2,97,879/- was filed by the assessee on 31.12.1993. The assessment under Section 143(3) of the Act was made on 14.3.1996 at an income for Rs. 4,49,490/-. Against the assessment order, the assessee went in appeal before the Commissioner of Income-tax (Appeals) [CIT(A)] who dismissed the same. The assessee filed further appeal before the Tribunal and vide order dated 19.8.2002, the Tribunal set aside the issue regarding liabilities claimed towards M/s. Aman Sales Pvt. Limited (Rs. 60,000/-), M/s. ASK Steel (Rs. 13,650/-), M/s. Technological Corporation (Rs. 29,998/-) and M/s. Guest Keen Williams Limited (Rs. 13,731/-) and remitted the same to the file of the Assessing Officer to decide as per law. In compliance to the directions of the Tribunal, notices under Sections 143(2) and 142(1) of the Act were issued requiring the assessee to file necessary evidence in support of the claim that these liabilities were allowable. The assessee vide letter dated 16.2.2005 submitted that all the details including copy of account of the creditors had already been submitted during the original assessment proceedings. It was further submitted that balances in the names of these parties were appearing since 1984 to 1987 and since the above liabilities were quite old and the addition made during the assessment year 1993-94 on the ground that liabilities had ceased to exist during the assessment year 1993-94 was not correct and there was no material/evidence to show that the liabilities ceased to exist during the year 1993-94, no addition on this account could be made. After considering the reply submitted by the assessee and the evidence on record, the Assessing Officer passed the assessment order dated 16.2.2005, Annexure P. 3, making taxable income at Rs. 4,49,492/-. The appeal filed by the assessee was also dismissed by the CIT(A) vide order dated 9.92005, Annexure P. 2. Still not satisfied, the appellant filed appeal before the Tribunal. Vide order dated 24.2.2006, Annexure P. 1, the Tribunal dismissed the appeal holding that the aforesaid amounts aggregating to Rs. 1,03,648/- were assessable as income of the assessee under the head income from business and not as unexplained credits under Section 68 of the Act. Hence the present appeal by the assessee.
(2.) Learned counsel for the appellant submitted that neither the provisions of Section 68 of the Act were attracted nor provisions of section 41(1) of the Act were applicable. It was urged that it was under bona fide belief that three entries in the books of account of the assessee amounting to Rs. 1,03,648/- which had been treated to be income by the Assessing Officer were not income of the assessee. It was also argued that the judgment of the Apex Court in CIT v. T.V. Sundaiam Iyengar & Sons Ltd., 1996 222 ITR 344 was not applicable and was distinguishable as in that case, the assessee had carried the amount to the profit and loss account and in such a situation, the amount was treated to be income of the assessee.
(3.) On the other hand, learned counsel for the respondent-revenue supported the order passed by the Tribunal.;