- (1.) This reference application u/s 256(2) of the Income Tax Act (for short, 'IT Act') is directed against the order of the Income Tax Appellate Tribunal (for short, 'ITAT') dt.21/05/1993 by which the reference application of the revenue u/s 256(1) of the IT Act was dismissed by the ITAT and it relates to the assessment year 1986-87.
(2.) The revenue has proposed following questions for the opinion of the High Court arising out of RA No.17/JP/1993:- "1. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs.12,381/- made on the basis of seized document, marked Annex. A-1 notwithstanding the fact that this addition made in the hands of the firm on substantive basis, has been deleted by the Tribunal? 2. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs.88,000/- made on account of unexplained advances as per seized pronotes notwithstanding the fact that additions of Rs.77,000/- in the asstt. year 1986-87 and Rs.11,000/- in the asstt. year 1985-86 respectively made on substantive basis in the case of the firm have been deleted? 3. Whatever on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs.8600/- on account of entries in diary marked as Annexure A-4 made on protective basis in the case of the assessee notwithstanding the fact that this addition has been deleted from the hands of the firm made on substantive basis? 4. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs.2500/- made on the basis of three pronotes as per Annexure A-1 on account of interest on advances of Rs.17,000/- notwithstanding the fact that the said addition made on substantive basis in the hands of the firm has been deleted by the Tribunal?
(3.) The brief facts, which can be noticed on perusal of the order passed u/s 256(1) and the order passed by the ITAT while deciding the matter, are that a search and seizure operation was carried out in the case of partnership firm M/s Ghindmal Kauromal on 05/09/1985 and the respondent-assessee happened to be the partner of firm M/s Ghindmal Kauromal and was also subjected to search, the other partners were also subjected to search. During the course of search, certain books of accounts, documents and other incriminating documents/material were found and seized. During the course of assessment proceedings, the Assessing Officer (for short, 'AO') scrutinized the said documents and had made additions on account of some of the documents and it was claimed that these documents pertained to the assessee. The AO also made additions on account of some papers/documents in the case of firm M/s Ghindmal Kauromal on substantive basis but since the assessee being a partner and the documents having been found in the possession and custody and at the residence of the assessee, therefore, on protective basis, the addition was also made in the hands of the assessee as well.;