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Issues:
1. Interpretation of provisions under section 256(2) of the Income Tax Act, 1961 regarding filing of reference applications for multiple assessment years. 2. Determination of whether questions raised for reference are pure questions of fact or law. Analysis: The judgment delivered by the High Court of Delhi pertains to four applications under section 256(2) of the Income Tax Act, 1961, relating to assessment years 1963-64, 1964-65, 1966-67, and 1967-68. The Income-tax Appellate Tribunal had decided four appeals together, prompting the assessee to file applications seeking reference on specific questions. However, the Tribunal dismissed the applications, leading the assessee to file a fresh application under section 256(2) of the Act. The court noted objections regarding the number of applications filed and the delay in filing them. The court deliberated on the necessity of filing separate applications for each assessment year despite a consolidated order by the Tribunal, emphasizing the requirement for distinct applications for individual years. Regarding the substantive issue, the court examined the nature of the assessee's money-lending business. The facts revealed that the business involved issuing fictitious loans on a commission basis, rather than genuine money-lending. The Income Tax Officer rejected the books of accounts, assessing the assessee based on the non-genuine nature of the business. The assessee's claim of some transactions being genuine money-lending was refuted due to lack of supporting evidence. The court emphasized that once the business was characterized as name-lending, all transactions became suspect, even potentially genuine ones. The court elucidated on the concept of name-lending business, highlighting the creation of false credits and debits to facilitate the use of unaccounted money. The court underscored that the burden of proving the genuineness of transactions lay with the parties involved, and declined to direct a reference on the questions raised, deeming them factual rather than legal in nature. In conclusion, the court dismissed all four applications seeking reference and the applications for condonation of delay. The judgment reinforced the requirement for separate reference applications for each assessment year and clarified the distinction between genuine money-lending and name-lending businesses, emphasizing the implications of engaging in deceitful practices. The decision underscored the importance of factual evidence in tax assessments and the burden of proof on the parties involved in establishing the authenticity of transactions.
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