P.P.S. Janarthana Raja, J.

This appeal is filed under Section 260A of the Income Tax Act, 1961 by the Revenue, against the order of the Income Tax Appellate Tribunal, Chennai Bench B, Chennai in I.T.A. No.891(Mds)/2001 dated 18.07.2003. On 28.01.2004, this Court admitted the appeal and formulated the following substantial questions of law.

"1. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in not considering the balance sheet and profit and loss account wherein contribution of the partners have been shown could be taken to be the books of account and the credits appearing therein have to be explained?

2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law especially when the appellant firm has not been able to explain the source of the capital invested by the partners which accordingly has to be treated as unaccounted income under Section 68 of the Income Tax Act?

3. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in not following the judgment rendered in 216 ITR page 9?"

2. The facts leading to the above substantial que