- (1.) ON an application filed under Section 256(2) of the Income-tax Act, 1961, this court directed the Tribunal to refer the following common questions for the assessment years 1974-75 and 1975-76 for our opinion : "Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in holding that the business in the name and style of Rawat Electricals at Ramganjmandi belonged to Shri Gulzarilal Rawat and not to Shri Suresh Kumar Rawat ? Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in holding that the amount of Rs. 8,000 was not an investment made by Shri Suresh Kumar Rawat in the concern of Rawat Electricals at Ramganjmandi and was made by his father Gulzarilal ?"
(2.) SINCE common facts are involved, we answer all the four questions by this common order. In compliance with the directions of this court, the aforesaid questions have been referred for our opinion. The Income-tax Officer vide his order dated September 17, 1977, held that the income from Rawat Electricals, Ramganjmandi, belongs to the assessee, though the assessee explained that the business was started by his son, Shri Suresh Kumar, who for the purpose of carrying on the business employed one Shri Mukut Bihari Lal, The Income-tax Officer did not believe this contention of the assessee. According to the Income-tax Officer, Suresh Kumar was a student and only 17 years of age, therefore, he could not run the business. The Income-tax Officer was further of the view that Suresh Kumar could not invest Rs. 8,000 in the business. The Income-tax Officer finally assessed that income from Rawat Electricals, Ramganjmandi, in the hands of the assessee. In appeal before the Appellate Assistant Commissioner, the assessee reiterated the same thing that income from Rawat Electricals, Ramganjmandi, has nothing to do with the assessee. The assessee further stated before the Appellate Assistant Commissioner that it is a business of his son, who invested Rs. 8,000 initially and employed his maternal uncle, Mukut Bihari Lal, who looks after the business and that Rs. 8,000 were invested after disclosure of that amount under the Voluntary Disclosure Scheme. The Appellate Assistant Commissioner also sustained the order of the Income-tax Officer, The same view has been taken by the Tribunal in the second appeal. Heard the learned counsel for the parties. Mr. Ranka, learned counsel for the assessee, submits that the assessee has nothing to do with the business run in the name of Rawat Electricals, Ramganjmandi. The business of Rawat Electricals, Ramganjmandi, belongs to his son, Suresh Kumar, who invested Rs. 8,000 after disclosure of the same under the Voluntary Disclosure Scheme. It was also explained that Suresh Kumar though a student at that point of time, employed his maternal uncle, Shri Mukut Bihari Lal, who looks after the business of Rawat Electricals, Ramganjmandi, and Rs. 700 per month has been paid to Mukut Bihari Lal. Considering the facts that when the investment in the firm, Rawat Electricals, Ramganjmandi has been shown after disclosure of statement under the Voluntary Disclosure Scheme, the dealings of Rawat Electricals were not only with the assessee-firm but in the open market with other similar type of traders, Rawat Electricals, Ramganjmandi, has got R. S. T., C. S. T. number and is also registered under the Shops and Commercial Establishments Act, the business income from Rawat Electricals in these circumstances cannot be taxed in the hands of the assessee merely on the ground that the proprietor of Rawat Electricals, Ramganjmandi, is the son of the assessee, Shri Gulzari Lal Rawat.
(3.) NORMALLY, in the reference, this court does not interfere in the finding of the Tribunal but the finding of the Tribunal as to whether Rawat Electricals, Ramganjmandi, is independent or benami property of Shri Gulzari Lal Rawat appears to be perverse. In such circumstances, this court should interfere. In our view with the above admitted facts, it cannot be said that the business of Rawat Electricals, Ramganjmandi, is the business of the assessee, Shri Gulzari Lal Rawat. The Tribunal has committed error in holding that the business of Rawat Electricals is the business of the assessee, Shri Gulzari Lal Rawat, and not of Suresh Kumar. In the result, we answer both the questions in the negative, i.e., in favour of the assessee and against the Revenue. Both the reference applications so made stand disposed of accordingly. ;