1996 (9) TMI 117

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....ve argument raised for the first time before them for set off of the unexplained cash credits against the estimated addition to the assessee's business income ? and 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in telescoping the unexplained credits with the estimated addition to the business income towards deficiency in gross profit, especially in view of the Delhi High Court's decision in CIT v. Kulwant Kaur [1980] 121 ITR 914 and that of the Andhra Pradesh High Court in CIT v. Maduri Rajaiahgari Kistaiah [1979] 120 ITR 294 ?" The assessee is a registered firm carrying on business as "forest contractor". In respect of the assessment year 1976-77, it disclosed a turn-over o....

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.... the gross profit addition to Rs. 1,50,000 but confirmed the cash credit addition of Rs. 1,21,000. The assessee then advanced an alternative argument based upon the ruling of the Supreme Court in Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457 that the cash credit addition should be telescoped into the gross profit addition. The Tribunal agreed with that and allowed a set off of Rs. 1,21,000 against the addition of Rs. 1,50,000. At the instance of the Revenue, this court has directed the Tribunal to refer the questions for consideration under section 256(2) of the Income-tax Act. Learned counsel for the Revenue contends that the Tribunal should not have entertained the plea of set off for the first time before them and tha....