1996 (5) TMI 44

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....plicant (Commissioner of Income-tax, Bhopal) has filed this application under section 256(2) of the Income-tax Act, 1961 (for short "the Act"), seeking a direction to the Tribunal to state the case and refer the proposed question, as extracted below, arising out of the order dated May 15, 1992, passed in I.T.A. No. 87/Ind of 1990, after rejection of the application, presented under section 256(1) ....

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....counting year relevant to the assessment year under consideration. The assessee was asked to prove the availability of the above amount credited in the cash book. The firm was also asked to prove the source of the amount. The assessee submitted a letter on March 10, 1985, to surrender the amount of Rs. 65,000 with the condition that no penalty should be imposed under section 271(1)(c) of the Act. ....

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....uch the penalty was wrongly cancelled. He further submitted that the conclusion culminating in cancellation of penalty is perverse and perversity gives rise to a question of law. Shri Jain, on the other hand, submitted that the penalty was cancelled on proper appreciation of the evidence and that the proposed question was not one of law. It emerges from the record that the assessee surrendered ....