KAPUR, J.

1. A Division Bench of this Court has in view of the difference of opinion between various Courts including different Benches of this Court referred the first question which has been stated to the High Court for opinion. The question referred by the Income-tax Appellate Tribunal is :

"(i) Whether a reference to the High Court is competent on the point indicated in the question following, which was not raised before or considered by the Tribunal ?"

2. It arises in the following circumstances. Nanak Chand Malik was a Government servant. After retiring from Government service in June, 1946, he started a business in the name and style of Mash Trading Company for purchasing and selling of goods from the Disposals Department and from other sources. The previous year in the present case is from the 1st of July, 1946, to the 30th of June, 1947. He filed a return showing a profit of Rs. 6,184. It is claimed that the accounts were found to be correct and in order but three items stated to be from undisclosed sources were taken into the revenue account by the Income-tax Officer. The items were

1. Rs. 40,000 found to be in fixed deposit on the 16th of July, 1946, in the name of the assessees wife.

2. Rs. 34,778 in the assessees personal account out of which Rs. 18,350 were dated after the 31st March, 1947.

3. Rs. 5,000 also in the assessees bank accounts, all of which were before the 31st of March, 1947.

3. It is necessary to see as to what was raised before the various officers and tribunals at various stages by the assessee. When the mater was taken to the Income-tax Appellate Assistant Commissioner the question with regard to Rs. 40,000 was raised in the forms that this Rs. 40,000 which was in deposit in the name of the wife of the assessee was obtained by her by selling her jewellery for a sum of Rs. 20,000 and that she took a loan of Rs. 15,000 from her father and the balance was made up out of the savings which she was able "to collect from the personal expenses." This statement was not accepted by the Income-tax Officer nor by the Assistant Commissioner.

4. In regard to the sum of Rs. 34,778 the Income-tax Officer refused to accept the explanation of the assessee, and the only question which seems to have been raised before the Appellate Assistant Commissioner is shown by his order at page 17 of the paper book and that was whether to the conclusion that this sum was undisclosed profits, and after taking into consideration the explanation given by the assessee the Assistant Commissioner allowed a deduction of Rs. 5,778 on this account.

5. Similarly in regard to Rs. 5,000 the Assistant Commissioner accepted the explanation of the assessee and held that only Rs. 3,500 remained unexplained and he thus allowed a deduction of Rs. 1,500.

6. The grounds of appeal filed by the assessee before the Income-tax Appellate Tribunal have not been placed before us but the order shows what was urged before the Tribunal have not been placed before us but the order shows what was urged before the Tribunal at the appellate stage.

7. In regard to Rs. 40,000 it was urged that this was the belongings of the wife and it was also submitted that the first transaction of the business having taken place in August 1946 no profits could have arisen as early as the 16th of July, 1946. The Tribunal then went on to discuss the case which had been put forward on behalf of the Revenue and then discussed the case which was put forward by the assessee as to how the Rs. 40,000 had been obtained, and after considering all that the Tribunal observed :

"We are satisfied that, for the reasons given by him, the Appellate Assistant Commissioner was right in refusing to admit the affidavit of the goldsmith produced at the belated stage for the first time before him. In our view, the assessee has not satisfactorily explained the receipt of Rs. 20,000 out of the so-called deposit of the sum of Rs. 40,000 and we, therefore, uphold Rs. 20,000 under this item and