TMI Blog2000 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... . and MRS. RUMA PAL. JUDGMENT The judgment of the court was delivered by S. P. BHARUCHA, J .-We are concerned in these appeals from a decision of a Division Bench of the High Court of Kerala (see [1985] 152 ITR 138), with the assessment year 1972-73, the previous year of which ended for the assessee on September 30, 1971. The question that was referred to the High Court and which it answered in the negative and against the assessee reads thus : "Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction of Rs. 4,18,107, under section 37 of the Income-tax Act, 1961 ?" The assessee, an individual. carried on the business of processing cashewnuts in ten units. Four of these units were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is here by special leave. It needs to be noted that the Revenue had sought the reference of six questions. The Tribunal had disallowed its application, in so far as it related to five questions on the basis that the one issue, that was covered by the question quoted above, had been split up into six questions. The Revenue did not file an application before the High Court under section 256(2) seeking reference of the rejected five questions. It is necessary to make a point of this because none of the six questions proceeded upon the basis that the Revenue considered the decision of the Tribunal on the facts to be perverse ; in other words, that it could not reasonably have been arrived at on the materials placed before the Tribunal. Alte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business had been affected by labour disputes, for the industrial health of the business as a whole, it was thought just and necessary that the industrial dispute in that one part of the business be stopped. This was the purpose for which the payment was made and it was, therefore, incurred for, the purposes of the business. The Tribunal noted, correctly, that it was for the assessee to decide how he would conduct his businesses For the purposes of continuing his business, he had to reduce the number of units from ten to six. Any incidental expense in reducing those units was an expenditure incurred in the course of conducting the business and allowable under section 37. The High Court, surprisingly, threw out all the findings of fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y jurisdiction of the High Court in a reference application is to answer the questions of law that are placed before it. It is only when a finding of the Tribunal on fact is challenged as being perverse, in the sense set out above, that a question of law can be said to arise. The only argument, fairly, that has been raised before us by the Revenue is that this expenditure could not be said to have been incurred in the course of the business because the four Kerala units in respect of which the expenditure was incurred had been shut down by the assessee. This argument would be acceptable if the Tribunal had found that these four units constituted a separate business. Having regard to the finding that these and all the other units outside K ..... X X X X Extracts X X X X X X X X Extracts X X X X
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