( 1 ) STATEMENT of case in the both the reference applications is same and pertain to the assessment year 1976-77. Referable questions in each of these applications are as under:- I. T. R No. 298/92: (Assessee Rnvinder Singh-HUF)

"whether on the facts and in the circumstances of the case the Income- tax Appellate Tribunal was legally correct in upholding the applicability of the provisions of section 28 (iv) of the Income-tax Act and sustaining the inclusion of the amount of Rs. 24,885. 00 to the income of the assessee ?"i. T. R. No. 299/82: (Assessee Joginder Singh-HUF)

"whether on the facts and in the circumstances of the case the income- lax Appellate Tribunal was legally correct in upholding the applicability of the provisions of section 28 (iv) of the Income-lax Act and sustaining the inclusion of the amount ofrs. 51,320. 00 to the income of the assessee ?"

( 2 ) IT were the assessees who sought reference of these questions on applications filed under section 256 (1) of the Income-tax Act, 1961 (for short the Act ). The Income- tax Appellate Tribunal. Delhi Bench, New Delhi, sent in the statement of the case to this Court for its opinion on the aforesaid questions of law.

( 3 ) AT the out set we may note that for subsequent assessment years the assessees succeeded in their appeals before the Appellate Tribunal and it was the Revenue which sought reference on the same questions, but the Appellate Tribunal declined its applications under section 256 (1) of the Act as in its opinion no question of law arose for determination by this Court. For those subsequent assessment years the Revenue has filed applications under section 256 (2) of the Act in this Court seeking a direction to the Appellate Tribunal to state a case and to refer to this Court the aforesaid question of law. The fate of those I. T. Cs. will depend upon the answers which we give in the present reference applications.

( 4 ) TO understand the rival contentions, facts in the case of only one assessee may be set out. The assessee-HUF (ITR 298/82) was a partner in a firm M/s. Dharam Singh Babek Singh ( the firm for short ). It was aregistered firm under the Act. The firm carried on business of financing purchase of automobiles on higher (hire?) purchase system, dealing in tyres and tubes, vehicles, sale and purchase of petrol and other allied products. During the course of assessment proceedings of the firm the Income-tax Officer (I. T. O.) found a debit balance of Rs. 2,76,500. 00 in the capital account of the assessee-HUF. The I. T. O. at the stage of draft assessment order came to a preliminary conclusion that the assessee-HUF utilised that amount of overdrawals disclosed in its capital account of the firm and utilised the same without paying any interest to the firm. The I. T. O. was of the opinion, therefore, that the assessee derived the abovesaid benefit byvirtue of his being a partner of the firm and he, therefore, proposed application of provisions of section 28 (iv) of the Act and held that this was certainly a benefit or perquisite and could arose only because the assessee-HUF was partner of the firm. The I. T. O. further held that considering the facts and circumstances of the assessee-HUF and taking into consideration the market rate of interest which fluctuated between 9% to 24% he arrived at a figure ofrs. 24,885/ as the benefit (9% of Rs. 2,76,500. 00 )obtained by the assessee and included this amount as part of the income of the assessee-HUF under section 28 (iv) of the Act. The assessment was completed and the assessment order was passed on 25 September 1979 under section 143 (3)/144b of the Act. The amount of Rs. 24. 885. 00 was treated as business income of the assessee-HUF being the benefit obtained on the account of utilisation of the amount of the firm without paying interest.

( 5 ) THE assessee appealed. The Commissioner of Income-tax (Appeals) by his order dated 10 March 1980 held the provisions of section 28 (iv) were attr