JUDGMENT
N.K Sud, J.
In pursuance of the direction of this court in Income-tax Case No. 48 of 1987 in CIT v. M/s. Variety Hosiery Mills, the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh has referred the following question of law arising out of its order dated 27-6-1985, relating to assessment year 1978-79, for the opinion of this court:
“Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in confirming the order of the CIT(A) allowing inclusion of anticipated profits for assessment on release orders and import licences in the absence of actual sale of goods or any other recognised system of accounting ?
2. For the assessment year 1976-77, the assessee had shown profit of Rs. 75,000 in greasy wool account. There was no sale of greasy wool in that year but the profit had been shown on estimate basis. The Income Tax Officer held that in the absence of any sales of wool, no income on the basis of anticipated profits could be assessed. He, therefore, excluded the said amount from the total income of the assessee for the assessment year 1976-77. There was no sale in this account even for the assessment year 1977-78. However, for the assessment year 1978-79, which is under consideration, there was sale of wool amounting to Rs. 4,88,348 on which a sum of Rs. 88,516 was shown as profit. Since the assessee had shown profit of Rs. 75,000 in assessment year 1976-77 on estimate basis, it returned the balance amount of Rs. 13,516 only in its return filed for the assessment year 1978-79.
3. For the assessment year 1976-77, the matter was carried in appeal before the Appellate Assistant Commissioner who reversed the order of the Income Tax Officer and directed the inclusion of profits of Rs. 75,000 in the greasy wool account in the income of the assessee for that year. On further appeal by the revenue, the Tribunal up-held the finding of the Appellate Assistant Commissioner holding that the assessee was following the method of showing estimated profits regularly right from the assessment year 1971-72 onwards. Against the order of the Tribunal, the revenue sought a reference under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on this issue which was not granted and the reference application was dismissed by the Tribunal vide order dated 29-11-1985. According to the assessee the order of the Tribunal rejecting the reference application has been accepted by the revenue as no further petition under section 256(2) of the Act was filed. This assertion has been supported by an affidavit of Mr. Madan Gopal Gupta-partner of the assessee firm. In view of the above position, it is clear that out of the total profit of Rs. 88,516 sale of greasy wool in assessment year under consideration, a sum of Rs. 75,000 already stands assessed in assessment year 1976-77 and the said assessment has since become final. In the back-drop of this factual position, no fault can be found with the finding of the Tribunal that it is only the balance amount of Rs. 13,516 which could be assessed during the assessment year 1978-79. Otherwise, it would result in taxing the same income twice, which is not permissible under law.
4. In this view of the matter, the question is answered in the affirmative i.e. in favour of the assessee and against the revenue.