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Issues:
Petition under s. 256(2) of the IT Act, 1961 for reference to High Court regarding addition of unexplained investment on purchase of drafts. Detailed Analysis: Issue 1: Addition of Rs. 1,95,000 on account of unexplained investment - The petitioner's return declared income of Rs. 29,260 for 1989-90, but the assessing authority assessed total income at Rs. 5,34,424. - Tribunal sustained addition of Rs. 1,95,000 as unexplained investment on purchase of drafts but deleted other additions. - Petitioner sought reference of questions of law to High Court under s. 256(1) of the Act, but Tribunal declined. - Counsel argued Tribunal's decision was unjustified based on cash flow statement showing sufficient cash available. - Tribunal found no question of law requiring adjudication by High Court. Issue 2: Source of funds for purchase of drafts - Assessing authority observed discrepancies in petitioner's statements regarding source of funds for drafts purchase. - AO treated Rs. 4,49,527 as investment from unexplained source, adding it to total income. - Tribunal agreed that funds were used for customs duty and demurrage charges, but only Rs. 1,95,000 could be considered unexplained investment peak amount. - Tribunal reasoned that entire amount of drafts not simultaneously available to assessee, supporting peak amount addition. - Tribunal's decision based on evidence and material on record, no grounds to substitute findings. Precedents and Conclusion: - Counsel argued for reevaluation of evidence, but Tribunal's findings based on evidence and not open to challenge. - Citing precedents, Tribunal's factual findings on acceptance or rejection of evidence not a question of law. - Upheld Tribunal's decision as no question of law arose in the case. - Petition dismissed by the High Court.
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