Referable question of law on bank credits and sections 68 and 69 required a reframed tax reference

The High Court held that a referable question of law did arise from the Tribunal's order because the applicability of sections 68 and 69 of the Income-tax Act, 1961 had to be examined on the facts found regarding credits in the assessee's bank accounts. It also held that the Tribunal had not made any definite finding that the amount was "unexplained", so that expression could not remain in the proposed question. The application was allowed and the Tribunal was directed to state a case on the reframed question limited to whether deletion of the amount from assessable income was correct.

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Issues: Whether a question of law arose from the Tribunal's order so as to warrant a direction under section 256(2) of the Income-tax Act, 1961, and whether the proposed question required reframing by omitting the unsupported expression "unexplained".

Analysis: The dispute concerned addition of Rs. 7 lakhs found credited in the assessee's bank accounts, which the revenue sought to treat as assessable income. The Court held that the Tribunal's view that no referable question arose could not stand because the applicability of sections 68 and 69 of the Income-tax Act, 1961 required consideration on the facts found. At the same time, the Tribunal had not recorded any definite finding that the amount was "unexplained", and that expression did not arise from the Tribunal's order.

Conclusion: The application was allowed, and the Tribunal was directed to state a case and refer the reframed question, confined to whether the Tribunal was correct in deleting Rs. 7 lakhs from the assessable income for the assessment year 1984-85.

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