B.S.DHILLON,J. - (1.) THE assessee is a HUF. The assessee has income from interest and house property. The assessment in question relates to the year 1970-71, and the relevant previous year ended on 31st of March, 1970. During the said previous year, the assessee had invested a sum of Rs. 83,042 in the construction of a house. As regards the total cost of construction of the said house, the ITO had two reports before him, one from the S. D. O. , P. W. D. , giving the estimated cost of the house as Rs. 87,668 and the other from the income-tax inspector giving the cost of construction as Rs. 1,06,846. The ITO made an addition of Rs. 15,000 as being the asses-see's unexplained investment in house property, after noting that the assessee had agreed to the said addition.
(2.) THE said addition of Rs. 15,000 was assailed by the assessee on appeal before the AAC. It was contended by the assessee that the construction of the house in question was completed only during the year ending 31st March, 1971, and that the total cost of construction was Rs. 98,152. He explained that since he had actually spent Rs. 15,000 over and above Rs. 83,000, he agreed to the addition of Rs. 15,000 but did not understand the consequences of this agreement that the said amount would be added to his income for the assessment year 1970-71. The AAC accepted the appeal filed by the assessee and deleted the addition of Rs. 15,000. On appeal filed by the ITO, the Tribunal reversed the AAC's order. It was held that the cost of construction of the house in question was irrelevant to the issue before the AAC and that, in the absence of a rectification application or an affidavit explaining the circumstances which misled the assessee to give his consent to the addition in question, the very appeal before the AAC was incompetent.
(3.) THE assessee made an application to the Tribunal for making of a reference to thjs court under Section 256 (1) of the I. T. Act, 1961 (hereinafter called "the Act"), arid consequently the Tribunal has referred the following two questions of law for our opinion : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, right in holding that in the absence of a rectification application and in the absence of an affidavit of the assessee explaining the circumstances which misled the assessee to give his consent to the addition of Rs. 15,000 no appeal could lie to the Appellate Assistant Commissioner ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, right in holding that it was irrelevant for the AAC to go into the merits of the cost of construction ?" ;