Allahabad H.C : Is the Tribunal legally correct in holding the view that the directions of the CIT(A) in his order dt. 25th March, 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 customers, as the said directions were applicable to normal hire purchase cases ?

Counsel Appeared

S.D. Singh, for the Applicant : A.N. Mahajan, for the Respondent

JUDGMENT

BY THE COURT :

By this application under s. 256(2) of the IT Act, 1961, the assessee-applicant prays that the Tribunal, Allahabad, 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 dt. 10th Dec., 1996, passed in ITA No. 2001 (All) of 1989, for the asst. yr. 1983-84 for the opinion of this Court :

“1. Is the Tribunal legally correct in holding the view that the directions of the CIT(A) in his order dt. 25th March, 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 customers, as the said directions were applicable to normal hire purchase cases ? If answer to question No. 1 about is in the negative, is the Tribunal legal correct in confirming the additions of Rs. 1,62,227 as income of the assessee which the assessee which the assessee never received having been granted as rebate to the customer for earlier closure of hire purchase cases concerned ? On the facts and circumstances of the case, was the Tribunal not empowered under the IT Act, 1961, to grant justice by deleting Rs. 1,62,227 which was admittedly never received as profit on hire in the present case ?”

2. We have heard Sri S.D. Singh, learned counsel for the assessee-applicant, and Shri 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 Tribunal to state a case and refer the aforesaid question for the opinion of the Court.

[Citation : 247 ITR 591]