ORDER
1. The Income-tax Appellate Tribunal, Allahabad has referred the following two questions of law under section 256(1) of the Income-tax Act, 1961, hereinafter referred to as 'the Act' for opinion to this Court:
" 1. Whether the ITAT is correct in law and on facts in reversing the order of the learned AAC setting aside the assessment after issuing a notice of enhancement under section 251 of the Income-tax Act, 1961?
2. Whether the Tribunal is correct in law and on facts in holding that the power of enhancement has not been properly exercised by the learned AAC in restoring the matter back to the Income-tax Officer after issuing a notice of enhancement for undertaking fresh investigation on a subject in respect of which the assessee had already discharged his onus?"
2. The matter relates to the assessment year 1974-75. The facts giving rise to the present reference are as follows:
2. The matter relates to the assessment year 1974-75. The facts giving rise to the present reference are as follows:
The assessee is one of the coparceners of the family of Sardar Khazan Singh, HUF. The HUF is engaged in money-lending business. In a search dated 5-10-1974, certain incriminating books and papers were found and seized from the bed room of Sardar Kamaljeet Singh. The Income-tax Officer found that the transactions recorded in the seized books related to undisclosed business of the assessee, Indrajeet Singh, Bhupendra Singh and Mahendra Singh. The Assessing Officer found certain cash loans of the Calcutta parties in the seized account books and these cash loans were added in the hands of the assessee. The addition was set aside by the CIT(A) by the order dated 5-3-1985 to enable the assessee to get opportunity to explain the cash loans properly. The ITO was asked to reframe the assessment order after affording an opportunity of hearing to the assessee. The ITO framed the second assessment order on 27-3-1986 and this time accepted the cash credit of Rs. 1,50,000 which were not earlier accepted. In appeal the D.C. (Appeals) issued a show-cause notice under section 251 of the Act requiring the assessee to explain as to why the cash credit of Rs. 1,50,000 which has been accepted by the ITO be not treated as assessee's income and the income should be enhanced accordingly. A reply was furnished by the assessee before the D.C. (Appeals) against the show-cause notice issued under section 256(1) of the Act. The D.C. (Appeals) after examining the reply of the assessee, set aside the assessment order and remanded back the matter to the ITO again with the directions that the genuineness of the cash credit may be adjudicated upon a fresh. Aggrieved against the aforesaid order the assessee filed a second appeal before the Tribunal. The Tribunal has allowed the appeal and found that the explanation submitted by the assessee establishes the genuineness of the cash credit in his account books. The Tribunal was also of the view that the power of enhancement of the assessment was not correctly exercised by the D.C. (Appeals) in the facts and circumstances of the case.
3. Heard Shri A.N. Mahajan, learned Standing Counsel for the department. None appeared for the respondent/assessee.
3. Heard Shri A.N. Mahajan, learned Standing Counsel for the department. None appeared for the respondent/assessee.
4. The Tribunal has recorded a finding that the assessee has discharged the onus which was on him to explain the nature and source of cash credit in question. The assessee discharged the onus by placing
4. The Tribunal has recorded a finding that the assessee has discharged the onus which was on him to explain the nature and source of cash credit in question. The assessee discharged the onus by placing
(i) confirmation letters of the cash creditors;
(ii) their affidavits;
(iii) their full addresses and GIR numbers and permanent account numbers.
It has found that the assessee's burden stood discharged and so, no addition to his total income on account of cash credits was called for. In view of this finding, we find that the Tribunal was right in reversing the order of the AAC, setting aside the assessment order.
5. In view of above discussion we answer question No. 1 in the affirmative, i.e., against the department/Revenue and in favour of the assessee/ respondent. In view of the answer of the first question in affirmative, the second question has become academic and needs no adjudication by this Court. There shall be no order as to costs.
5. In view of above discussion we answer question No. 1 in the affirmative, i.e., against the department/Revenue and in favour of the assessee/ respondent. In view of the answer of the first question in affirmative, the second question has become academic and needs no adjudication by this Court. There shall be no order as to costs.