RAJESH BALIA, J. - (1.) HEARD learned counsel for the Revenue. No one appears for the assessee in spite of service. This is an application under S. 256(2) of the IT Act, 1961, at the instance of Revenue requiring the Tribunal, Jaipur Bench, Jaipur, to state the case and refer the following questions of law said to be arising out of the Tribunal appellate's order dt. 13th March, 1984, for the asst. yr. 1975-76 in the case of the respondent-assessee. (i) Whether, on the facts and in the circumstances of the case the Tribunal was justified in holding that Rs. 1,85,000 is not income of the assessee representing from undisclosed sources ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in bifurcating Rs. 1,85,000 being the value of gold ornaments detected in the course of search in the year 1974 relevant to the asst. yr. 1975-76, to different years ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in concluding that the assessee could have earned an income of about Rs. 35,000 in the year under assessment and thereby in sustaining the addition to the tune of Rs. 35,000 ? The Tribunal has rejected the application under S. 256(1) filed by the CIT on the ground that the questions as raised are pure questions of fact and there being no legal issue arising therefrom.
(2.) ON a search being carried on in the premises of the respondent-assessee on 15th June, 1974, the assessee was found in possession of 18.818 kgs. of gold and gold ornaments. The assessee was required to show the source of acquisition and possession of the gold. The explanation furnished by the assessee in respect of it was not found to be satisfactory by the AO and he made addition of a value of said gold as income from undisclosed sources. On appeal, the CIT(A) has accepted the claim of the assessee to the extent that 35 per cent of the total weight of gold that is to say 6.818 kgs. as gold in possession of the assessee's business of pawning and to that extent partly accepted the appeal. However, for balance of 12 kgs., of gold found in possession of the assessee, the explanation of the assessee was not accepted by the CIT (A). On further appeal before the Tribunal, the Tribunal accepted the claim of the assessee that out of remaining 12 kgs., gold, 5 kgs. gold belonged to three daughters-in-law of the assessee and not to the assessee. For the remaining 7 kgs., of the gold which was valued at Rs. 1,85,000, The Tribunal held as under : "As far as the assessee-HUF is concerned, the fact with which the Department is not disputing is that the business is being carried on of pawning, etc. for the last several years and it is quite likely that the assessee-HUF could have acquired this gold over the last several years. As per the Departmental valuer's report, the total quantity of gold items of 18.818 kgs. are of a value of Rs. 4,88.712. On this basis, the value of 7 kgs. of gold items comes to about Rs. 1,85,000. Since it cannot be said in view of the past assessed results of assessee HUF that Rs. 1,85,000 was earned by the assessee in one year, we are of the view that the assessee could have earned an income of about Rs. 35,000 in the year under review with which he had acquired part of the gold and, therefore, we are of the view that an addition to the income should be sustained to the tune of Rs. 35,000 for the year. Aggrieved with the aforesaid order the assessee as well as Revenue made separate applications for making a reference to this Court the question suggested by the respective parties under S. 256(1). The Tribunal rejected both the applications. This application under S. 256(2) relates to application moved by the Revenue. The questions suggested by the Department quoted hereinabove all relate to above controversy. The Tribunal rejected the reference application of the Revenue on the ground that aforesaid questions are not questions of law arising out of its order, but are questions of facts. Having heard learned counsel for the Revenue, we are of the opinion that this conclusion of Tribunal is erroneous that no questions of law arise out of its appellate order, inasmuch as the question Nos. 2 and 3 clearly invite interpretation of S. 69A which reads as under : Sec. 69A : Where in any financial year the assessee is found to be the owner of any bullion, jewellary or other valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the AO, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year."
(3.) ON the one hand a presumption has been raised by the Tribunal that since the assessee is carrying on business for number of years, therefore, he might have acquired the gold in question from the undisclosed income attributable to number of years during long period, and on the other hand there exists a statutory presumption under S. 69A in favour of Revenue when explanation furnished by an assessee is not found satisfactory about possession of any cash or other valuables found in possession of a person that it is deemed to be the income of the assessment year relevant to the previous year in which assessee was found in possession of the unexplained assets. We are of the opinion that all the three questions suggested by the Revenue in its application refer to only single aspect of the same issue which has been wholesomely embedded in question No. 2 which is a question of law and do arise out of Tribunal's appellate order. Accordingly, we allow this application and direct the Tribunal to state the case and refer the question No. 2 of the three questions suggested by the Revenue as question of law arising out of the Tribunal's order for its opinion of this Court. No orders as to costs.;