ISMAIL J.

The Income-tax Appellate Tribunal under section 256 (1) of the Income-tax Act, 1961, has referred the following questions of law for the opinion of this court :

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and justified in deleting the addition of Rs. 31, 000 made by the Income-tax Officer under the head 'other sources' for 1963-64 assessment ?

(2) Whether the conclusion of the Tribunal in deleting the addition of Rs. 31, 000 is based on a reasonable view of the facts and circumstances of the case ?" *

The assessee is a dealer in crepe soles, raw rubber, etc. For the assessment year 1963-64, the relevant accounting year being the preceding financial year, he returned an income of Rs. 10, 260 under "business". At the time of hearing before the Income-tax Officer, it was submitted for the assessee that the proviso to section 145 (1) of the Income-tax Act was applicable and that the assessee had no objection to the estimate of gross profit as in the preceding year. This resulted in an addition to Rs. 15, 500 to the disclosed trading results. There were also some hundi transactions during the previous year and the assessee filed a peak credit statement showing a peak credit of Rs. 31, 000. By his letter dated September 2, 1966, the assessee's representative admitted that a sum of Rs. 31, 000 said to be hundi loans was not capable of verification and, therefor, may be treated as having been admitted under section "F" of the return of income. It was also claimed on behalf of the assessee that a sum of Rs. 8, 500 out of the total amount of Rs. 31, 000 pertained to the previous year and that it should be deducted. It was further claimed that the said sum of Rs. 31, 000 should be set off against the intangible additions of the earlier years. The Income-tax Officer declined to comply with this request of the assessee. He held that the assessee had not linked the intangible additions of the past years with the appearance of the credits and unless the assessee proved that the hundi credits were introduced out of profits made in the trading account outside the books, it was not possible to telescope the two additions, with the result, he assessed a sum of Rs. 31, 000 as income from other sources.Against the order of the Income-tax Officer, the assessee preferred an appeal to the Appellate Assistant Commissioner of Income-tax and before that officer the assessee contended that the ruling of this court in S. Kuppuswamy Mudaliar v. Commissioner of Income-tax enabled the assessee to claim a set-off of the gross profit additions of the past years against the unexplained credits in the year in question. The Appellate Assistant Commissioner declined to accept this argument and, in his view, the decision of this court in S. Kuppuswamy Mudaliar v. Commissioner of Income-tax must be taken to have been overruled by the subsequent decision of the Supreme Court in Commissioner of Income-tax v. Devi Prasad Vishwanath Prasad with the result, he sustained the order of the Income-tax Officer. The assessee, thereafter, preferred a second appeal to the Income-tax Appellate Tribunal. The Tribunal held that the decision of this court in S. Kuppuswami Mudaliar v. Commissioner of Income-tax applied to the facts of this case and that the decision cannot be said to have been overruled by the subsequent decision of the Supreme Court in Commissioner of Income-tax v. Devi Prasad Vishwanath Prasad with the result, he sustained the order of the Income-tax Officer. The assessee, thereafter, preferred a second appeal to the Income-tax Appellate Tribunal.The Tribunal held that the decision of this court in S. Kuppu swami Mudaliar v. Commissioner of Income-tax 19 6451 ITR 757 (Mad) applied to the facts of this case and that the decision cannot be said to have been overruled by the subsequent decision of the Supreme Court in Commissioner of Incpme-tax v. Devi Prasad Vishwanath Prasad 19 6972 ITR