Kailash Finance Company vs Commissioner of Income Tax

By this application u/s 256(2) of the Income Tax Act, 1961, the assessee-applicant prays that the Income Tax Appellate Tribunal, Allaha- bad, be directed to state a case and to refer the following questions stated to be of law and to arise out of the Tribunal''s order dated December 10, 1996, passed in I. T. A. No. 2001 (All) of 1989, for the assessment year 1983-84 for the opinion of this court :

"1. Is the Appellate Tribunal legally correct in holding the view that the directions of the Commissioner of Income Tax (Appeals) in his order dated March 25, 1998, were applicable to cases of early closure also in which full finance charges or hire purchase profit neither accrued nor-were received by the assessee having been granted as rebate to the customer, as the said directions were applicable to normal hire purchase cases ?

If answer to question No. 1 above is in the negative, is the Appellate Tribunal legally correct in confirming the additions of Es. 1,62,227 as income of the assessee which the assessee never received having been granted as rebate to the customer for early closure of hire purchase cases concerned ?

On the facts and circumstances of the case, was the Appellate Tribunal not empowered under the Income Tax Act, 1961, to grant justice by deleting Rs. 1,62,227 which was admittedly never received as profit on hire in the present case ?"

We have heard Sri S. D. Singh, learned counsel for the assessee-appli-cant, and Sri A. N. Mahajan, learned counsel for the respondent.

In our view, the following question of law arises from the order of the Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the addition of Rs. 1,62,227 representing short recoveries from the customers for computing the business income of the assessee ?

We accordingly direct the Appellate Tribunal to state a case and refer the aforesaid question for the opinion of the court.