N.K. Sodhi, J.
1. This order will dispose of two income-tax cases Nos, 58 and 59 of 1994, in which common questions of law and fact arise. For the sake of convenience, the facts are being taken from I.T.C. No. 58 of 1994.
2. The assessee is an individual. He through a gift deed gifted 6,000 equity shares of the face value of Rs. 25 each of Hero Cycles to Yogesh Chander and Brothers Associates, 4,000 shares by way of bonus came to be received by the donee and a sum of Rs. 25,000 was also received duringthe relevant assessment years as dividend income on these bonus shares. In proceedings under the Gift-tax Act, the Gift-tax Officer held that the gift was void. This finding was affirmed in appeal but in second appeal the Tribunal as per its order dated August 23, 1991 in G. T. A. No. 3 of 1988 reversed the finding and held that the gift was valid. By an order dated December 31, 1993, the Tribunal referred the question regardingthe validity of the gift to this court for its opinion and the matter is pending in this court.
3. In the assessment proceedings under the Income-tax Act (for short the 'Act'), the Assessing Officer held that since the gift to Yogesh Chander and Brothers Associates was void, the sum of Rs. 25,000 received by the donee had to be taxed in the hands of the donor-assessee herein. Feeling aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who upheld the order and affirmed the addition made in the income of the assessee. When the matter came up before the Tribunal in second appeal, it referred to its earlier decision dated August 23, 1991, in G. T. A. No. 3 of 1988, and observed that since the gift had already been held to be valid, there was no justification for the addition of Rs. 25,000 in the hands of the assessee. Consequently, the appeal of the assessee was allowed as per order dated November 6, 1992, and the addition was ordered to be deleted. It is against this order that the Revenue has filed the present petition under Section 256(2) of the Act for a direction to the Tribunal to refer the following question of law to this court for its opinion :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the addition of Rs. 25,000 made in the assessee's hands relating to dividend income on bonus sharesreceived by Yogesh Chander and Brothers Associates to whom the assesseehad earlier gifted equity shares and the said gift was held to be wholly void ?'
4. We have heard counsel for the parties and perused the orders of the Appellate Tribunal. The question whether the sum of Rs. 25,000 should be assessed in the hands of the assessee depends on the answer to the question whether the gift made by the assessee was valid or not and since that question already stands referred to this court, it becomes necessary to dispose of both the questions together.
5. Mr. B.S. Gupta, senior advocate appearing for the assessee, strenuously urged before us that since the Department has not challenged the finding of the Tribunal regarding the validity of gift, the question now sought to be raised could not be referred to this court. He relied on Haripada Samanta Pramatha Nath Samanta v. CIT : [1981]128ITR592(Cal) and CIT v. Lahhiram Ramdas : [1962]44ITR726(SC) . We are unable to agree with this contention of learned counsel. The finding regarding the validity of the gift has been challenged by the Department and the Tribunal itself has referred that question to this court against its order in G.T.A. No. 3 of 1988. The cases relied upon by learned counsel are distinguishable on the facts.
6. In the result, we allow these petitions and direct the Tribunal to refer the following question of law to this court for its opinion along with the statement of case :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the addition of Rs. 25,000 made in the hands of the assessee relating to dividend income on bonus shares received by Yogesh Chander and Brothers Associates to whom the assessee had earlier gifted the equity shares ?'
7. No costs.